BILL NUMBER: AB 2890 CHAPTERED
BILL TEXT
CHAPTER 776
FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2000
APPROVED BY GOVERNOR SEPTEMBER 26, 2000
PASSED THE ASSEMBLY AUGUST 22, 2000
PASSED THE SENATE AUGUST 18, 2000
AMENDED IN SENATE AUGUST 8, 2000
INTRODUCED BY Committee on Consumer Protection, Governmental
Efficiency and Economic Development (Davis (Chair), Leach (Vice
Chair), Correa, Cox, Lempert, Machado, and Wesson)
MARCH 9, 2000
An act to amend Section 3320 of the Civil Code, to amend Section
14838.5 of the Government Code, to amend Section 38079 of the Health
and Safety Code, to amend Sections 10295.5, 10300, 10302.5, 10302.6,
10304, 10307, 10308, 10308.5, 10309, 10310, 10311, 10312, 10313,
10314, 10315, 10318, 10319, 10320, 10320.5, 10321, 10325, 10326,
10327, 10328, 10330, 10331, 10332, 10333, 10334, 12100.5, 12100.7,
12101, 12102, 12103, 12104, 12108, 12109, 12112, 12113, and 12120 of,
to amend the heading of Article 3 (commencing with Section 10300) of
Chapter 2 of, to amend the heading of Chapter 2 (commencing with
Section 10290) of, and to amend the heading of Chapter 3 (commencing
with Section 12100) of, Part 2 of Division 2 of, and to repeal
Sections 10295.1, 10295.3, 12111, and 12113.5 of, the Public Contract
Code, relating to public contracts, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 2890, Committee on Consumer Protection, Governmental Efficiency
and Economic Development. Public contracts.
Under existing law, a state agency may award a contract for goods,
services, or information technology that has an estimated value
between $2,500 and $50,000 by obtaining quotations from at least 2
small businesses. For these contracts, a state agency does not have
to comply with bidding and contract award requirements that govern
contracts of greater value.
This bill would make corrective changes to these provisions, to
clarify that contracts with a value greater than $2,500 and less than
$50,000 do not have to comply with various provisions that generally
govern public contracts.
Existing law generally governs the state procurement of materials,
supplies, equipment, and services, and the acquisition of electronic
data-processing and telecommunications goods and services.
This bill would make various technical and clarifying changes to
these provisions and would delete outdated provisions.
This bill would incorporate additional changes in Section 14838.5
of the Government Code, proposed by SB 1049, to be operative only if
SB 1049 and this bill are both chaptered and become effective on or
before January 1, 2001, and this bill is chaptered last.
The bill would declare that it is to take effect immediately as an
urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 3320 of the Civil Code is amended to read:
3320. (a) In each contract for public works of improvement,
entered into on or after January 1, 1996, the public agency shall pay
to the prime design professional any progress payment within 30 days
of receipt of a written demand for payment in accordance with the
contract, and the final retention payment within 45 days of receipt
of a written demand for payment in accordance with the contract. If
the public agency disputes in good faith any portion of the amount
due, it may withhold from the payment an amount not to exceed 150
percent of the disputed amount. The disputed amount withheld is not
subject to any penalty authorized by this section.
(b) If any amount is wrongfully withheld or is not timely paid in
violation of this section, the prime design professional shall be
entitled to a penalty of 11/2 percent for the improperly withheld
amount, in lieu of any interest otherwise due, per month for every
month that payment is not made. In any action for the collection of
amounts withheld in violation of this section, the prevailing party
is entitled to his or her reasonable attorney's fees and costs.
(c) The penalty described in subdivision (b) is separate from, and
in addition to, the design professionals' liens provided by Chapter
8 (commencing with Section 3081.1) of Title 14 of Part 4 of Division
3, mechanics' liens provided by Chapter 2 (commencing with Section
3109) of Title 15 of Part 4 of Division 3, and stop notices for
public works provided in Chapter 3 (commencing with Section 3156) of
Title 15 of Part 4 of Division 3.
(d) This section does not apply to state agency contracts subject
to Section 927.6 of the Government Code.
(e) None of the rights or obligations created by this section
between prime design professionals and public agencies apply to
construction loan funds held by a lender pursuant to a construction
loan agreement.
(f) For purposes of this section:
(1) "Public agency" means the state, any county, any city, any
city and county, any district, any public authority, any public
agency, any municipal corporation or other political subdivision or
political corporation of the state.
(2) "Design professional" means a person licensed as an architect
pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of
the Business and Professions Code, registered as a professional
engineer pursuant to Chapter 7 (commencing with Section 6700) of
Division 3 of the Business and Professions Code, or licensed as a
land surveyor pursuant to Chapter 15 (commencing with Section 8700)
of Division 3 of the Business and Professions Code.
(3) "Prime design professional" means a design professional with a
written contract directly with the public agency.
SEC. 2. Section 14838.5 of the Government Code is amended to read:
14838.5. (a) Notwithstanding the advertising, bidding, and
protest provisions of Chapter 6 (commencing with Section 14825) of
this code, and Chapter 2 (commencing with Section 10290) and Chapter
3 (commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, a state agency may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than two thousand five hundred dollars
($2,500), but less than fifty thousand dollars ($50,000), to a small
business, as long as the agency obtains price quotations from two or
more small businesses.
(b) In carrying out subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible small
business.
(c) If the estimated cost to the state is less than two thousand
five hundred dollars ($2,500) and for the acquisition of goods,
services, or information technology, or a greater amount as
administratively established by the director, a state agency shall
obtain at least two price quotations from responsible suppliers
whenever there is reason to believe a response from a single source
is not a fair and reasonable price.
SEC. 2.5. Section 14838.5 of the Government Code is amended to
read:
14838.5. (a) Notwithstanding the advertising, bidding, and
protest provisions of Chapter 6 (commencing with Section 14825) of
this code and Chapter 2 (commencing with Section 10290) and Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, a state agency may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than five thousand dollars ($5,000), but
less than one hundred thousand dollars ($100,000), to a small
business, as long as the agency obtains price quotations from two or
more small businesses.
(b) In carrying out subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible small
business.
(c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the acquisition of goods, services, or
information technology, or a greater amount as administratively
established by the director, a state agency shall obtain at least two
price quotations from responsible suppliers whenever there is reason
to believe a response from a single source is not a fair and
reasonable price.
SEC. 3. Section 38079 of the Health and Safety Code is amended to
read:
38079. (a) All cooperative agreements, regardless of the size of
the contracting nonprofit organization, are subject to the late
payment provisions in Section 927.6 of the Government Code.
(b) In implementing this division, the department shall have the
authority of, and be subject to, the provisions set forth in Chapter
2 (commencing with Section 124475) of Part 4 of Division 106, except
that those provisions apply to all cooperative agreements, not only
those agreements with clinics. However, notwithstanding Section
124500, moneys in the Clinic Revolving Fund of the State Department
of Health Services shall be used for purposes of this division only
upon appropriation of funds by the Legislature for that purpose.
SEC. 4. The heading of Chapter 2 (commencing with Section 10290)
of Part 2 of Division 2 of the Public Contract Code is amended to
read:
CHAPTER 2. STATE ACQUISITION OF GOODS AND SERVICES
SEC. 6. Section 10295.1 of the Public Contract Code is repealed.
SEC. 7. Section 10295.3 of the Public Contract Code is repealed.
SEC. 8. Section 10295.5 of the Public Contract Code is amended to
read:
10295.5. (a) Notwithstanding any other provision of law, no state
agency shall acquire or utilize sand, gravel, aggregates, or other
minerals produced from a surface mining operation subject to the
Surface Mining and Reclamation Act of 1975 (Chapter 9 (commencing
with Section 2710) of Division 2 of the Public Resources Code),
unless the operation is identified in the list published pursuant to
subdivision (b) of Section 2717 of the Public Resources Code as
having either of the following:
(1) An approved reclamation plan and financial assurances covering
the affected surface mining operation.
(2) An appeal pending before the State Mining and Geology Board
pursuant to subdivision (e) of Section 2770 of the Public Resources
Code with respect to the reclamation plan or financial assurances.
(b) The department shall revise its procedures and specifications
for the acquisition of sand, gravel, aggregates, and other minerals
to ensure maximum compliance with this section.
(c) For purposes of this section, "minerals" means any naturally
occurring chemical element or compound, or groups of elements and
compounds, formed from inorganic processes and organic substances,
including, but not limited to, coal, peat, and bituminous rock, but
excluding geothermal resources, natural gas, and petroleum.
(d) The requirements of this section shall apply to mining
operations on federal lands or Indian lands that are subject to the
Surface Mining and Reclamation Act of 1975 (Chapter 9 (commencing
with Section 2710) of Division 2 of the Public Resources Code)
pursuant to a memorandum of understanding between the Department of
Conservation and the federal agency having jurisdiction over the
lands.
SEC. 9. The heading of Article 3 (commencing with Section 10300)
of Chapter 2 of Part 2 of Division 2 of the Public Contract Code is
amended to read:
Article 3. Competitive Bidding and Other Acquisition
Procedures
SEC. 10. Section 10300 of the Public Contract Code is amended to
read:
10300. (a) A Customer and Supplier Advocate shall be established
in the department as a resource to state agencies and departments,
and suppliers seeking information regarding the state process,
procedures, and regulations for bidding on state contracts, and as a
resource to bidders seeking to file a protest on award in accordance
with this chapter. The advocate shall, at a minimum, provide the
following services to the protesting bidder:
(1) Assistance to customer departments and agencies regarding
contracting rules and regulations, and acquisition resource options.
(2) Assistance to the bidder in assessing the validity of the
bidder's proposed grounds of filing the protest in accordance with
the terms of the solicitation, as well as statutory or regulatory
guidelines governing the solicitation in question.
(3) Provision of information to the protesting bidder regarding
avenues and options available to the bidder to proceed with a formal
protest of the award.
(b) The advocate shall make services, as specified in this
section, available on a timely basis to the protesting bidder.
(c) Notification to bidders regarding the availability of services
by the advocate shall be included in the solicitation. This
notification shall also outline procedures and timelines for bidders
who may wish to engage the services of the advocate.
SEC. 11. Section 10302.5 of the Public Contract Code is amended to
read:
10302.5. All product specifications that the department or any
other state agency prepares for goods for any contract entered into
by any state agency for the acquisition of goods under Section 10295
are not subject to the review and adoption procedure under Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code.
SEC. 12. Section 10302.6 of the Public Contract Code is amended to
read:
10302.6. Product specifications as prepared by the department or
any other state agency shall not be written with the intent of
excluding goods manufactured, produced, grown, or otherwise
originating in California.
SEC. 13. Section 10304 of the Public Contract Code is amended to
read:
10304. All bids shall be sealed and shall be publicly opened and
read at the time set forth in the solicitation, provided any person
present desires the bids to be so read. No bids shall be considered
which have not been received in the office of the department prior to
the closing time for bids set forth in the invitations to bids. The
department shall maintain confidentiality regarding each bid until
the public opening and reading takes place.
SEC. 14. Section 10307 of the Public Contract Code is amended to
read:
10307. The director shall establish statewide acquisition
standards, the purpose of which shall be to ensure the necessary
quality of goods acquired by or under the supervision of the
department and to permit the consolidation of acquisitions in order
to effect greater economies in state contracting.
SEC. 15. Section 10308 of the Public Contract Code is amended to
read:
10308. Except as provided otherwise in this chapter, every
acquisition of goods in excess of one hundred dollars ($100) for any
state agency shall be made by or under the supervision of the
department. However, the state agency may specify the quality of the
goods to be acquired. If the department determines that the quality
specified by the agency is inconsistent with the statewide standards
established by the director under Section 10307, it shall change the
request to make it consistent with the standards, and it shall
notify the state agency, within a reasonable time, before a contract
is issued. If the agency is of the opinion the interests of the
state would not be served by the acquisition of goods of a lesser
quality or different than that specified by the agency, the agency
may request a hearing before the State Board of Control and the board
shall determine which goods will best serve the interests of the
state, whereupon the department shall issue a contract for the goods
specified by the State Board of Control.
SEC. 16. Section 10308.5 of the Public Contract Code is amended to
read:
10308.5. Contractors shall certify in writing, under penalty of
perjury, to the state agency awarding a contract, the minimum, if not
exact, percentage of recycled content, both postconsumer material
and secondary material as defined in Sections 12161 and 12200, in
goods offered or products used in the performance of the contract,
regardless of whether the product meets the required recycled product
percentage as defined in Sections 12161 and 12200. The contractor
may certify that the product contains zero recycled content. This
section shall apply to all state contracts and, to the extent
feasible, all federally funded contracts.
SEC. 17. Section 10309 of the Public Contract Code is amended to
read:
10309. Except as provided in Sections 10332 and 10333, no state
agency may acquire goods in the open market, unless permission has
been given by the department, upon a showing of the necessity
therefor.
SEC. 18. Section 10310 of the Public Contract Code is amended to
read:
10310. Upon the request of the department, every state agency
that is authorized by law to acquire goods shall designate some
person in the agency whose duty it shall be to make reports to the
department at times and in a manner as it may require.
SEC. 19. Section 10311 of the Public Contract Code is amended to
read:
10311. (a) An estimate or requisition approved by the state
agency in control of the appropriation or fund against which an
acquisition is to be charged, is full authority for any contract for
goods of the quality specified by the agency or determined by the
State Board of Control as provided in this article made pursuant
thereto by the department.
(b) The department shall issue a call for bids within 30 days
after receiving a requisition for any goods that are regularly
acquired within this state. The period of closing time designated in
the invitations for bids shall be exclusive of holidays and shall be
extended to the next working day after a holiday.
(c) Except as provided in subdivision (d), after the closing date
for receiving any bids within or without this state, the contract
shall be awarded or the bids shall be rejected within 45 days unless
a protest is filed as provided in Section 10306.
(d) After the 45-day time period prescribed by subdivision (c),
the department may in its sound discretion either award the contract
to the lowest responsible bidder meeting specifications who remains
willing to accept the award or else reject all bids.
(e) The amendments made to this section at the 1987-88 Regular
Session of the Legislature do not constitute a change in, but are
declaratory of, existing law.
SEC. 20. Section 10312 of the Public Contract Code is amended to
read:
10312. Immediately upon the rendition of services or the delivery
of goods, the disbursing officer shall transmit the invoice or
demand for payment together with his or her sworn statement to the
Controller. The sworn statement shall show that the services have
been rendered and the goods delivered to the state agency in
accordance with the contract and law.
SEC. 21. Section 10313 of the Public Contract Code is amended to
read:
10313. The director may make the services of the department under
this article available, upon such terms and conditions as he or she
may deem satisfactory, to any tax-supported public agency in the
state, including a school district, for assisting the agency in the
acquisition of television communications equipment.
SEC. 22. Section 10314 of the Public Contract Code is amended to
read:
10314. Any contract for goods to be manufactured by the
contractor specially for the state and not suitable for sale to
others in the ordinary course of the contractor's business may
provide, on such terms and conditions as the department deems
necessary to protect the state's interests, for progress payments for
work performed and costs incurred at the contractor's shop or plant,
provided that not less than 10 percent of the contract price is
required to be withheld until final delivery and acceptance of the
goods, and provided further, that the contractor is required to
submit a faithful performance bond, acceptable to the department, in
a sum not less than one-half of the total amount payable under the
contract securing the faithful performance of the contract by the
contractor.
SEC. 23. Section 10315 of the Public Contract Code is amended to
read:
10315. The department may rent, lease, construct, and maintain
warehouses and make the rules and regulations that are necessary for
the proper and economical making of state acquisitions.
SEC. 24. Section 10318 of the Public Contract Code is amended to
read:
10318. No state agency or employee thereof shall draft or cause
to be drafted, any specifications for bids, in connection with the
acquisition or contemplated acquisition of any goods or textbooks for
use in the day and evening elementary schools of the state, in such
a manner as to limit the bidding directly or indirectly, to any one
bidder.
Bidders may be required to furnish a bond or other indemnification
to the state against claims or liability for patent infringement.
SEC. 25. Section 10319 of the Public Contract Code is amended to
read:
10319. To meet an emergency, goods of a perishable nature, in an
amount not exceeding one hundred dollars ($100) in value, may be
acquired by a state agency without the permission of the department.
SEC. 26. Section 10320 of the Public Contract Code is amended to
read:
10320. (a) The department shall annually prepare a delegation
program for district agricultural associations to be administered by
the Department of Food and Agriculture and the department pursuant to
the following criteria:
(1) The department shall annually review acquisitions to be
included in the program and the amount of delegation for each type of
acquisition.
(2) The department shall annually review with the Department of
Food and Agriculture the aggregate limit for the delegation program.
(3) The department shall annually communicate with each fair
eligible for the delegation program, information relating to the
procedure to be followed for using the delegation, including, but not
limited to, the things included in the delegation program.
(b) The Division of Fairs and Expositions in the Department of
Food and Agriculture shall include, as part of its annual expenditure
review and approval process presented to the Joint Committee on
Fairs Allocation and Classification, a section describing the
purchasing delegation authority granted to all district agricultural
associations pursuant to subdivision (a). This information shall
include, but need not be limited to, the annual amount of purchasing
delegation authority requested by, and delegated to, each district
agricultural association.
SEC. 27. Section 10320.5 of the Public Contract Code is amended to
read:
10320.5. (a) Commencing January 1, 1992, all state agencies
subject to this chapter that enter into installment purchase or
lease-purchase contracts shall make periodic payments, which shall
include interest computed from a date no later than the acceptance
date of the goods purchased pursuant to the contract. However, if
the contract requires an acceptance test, interest shall be computed
from a date no later than the first day of the successful acceptance
test period. Unless otherwise provided for in the contract, periodic
payments shall commence upon acceptance of the goods or, if the
contract requires an acceptance test, as of the first day of the
successful acceptance test period. Late charges shall accrue for any
periodic payment not made to the contractor or its assigns from
either the payment date provided in the contract or 60 days following
the receipt of a valid invoice for the periodic payment, whichever
is later. However, in the event any invoice is received prior to the
acceptance date, the receipt date of the invoice shall be construed
to be the acceptance date. Late charges under this section shall be
assessed using the interest rate as specified in Section 927.6 of the
Government Code.
(b) The department is authorized to refinance installment purchase
contracts when, in the determination of the department, it is
financially beneficial to the state to do so.
SEC. 28. Section 10321 of the Public Contract Code is amended to
read:
10321. (a) The Legislature finds and declares that fairs are a
valuable community resource and recognizes that local businesses and
local communities make valuable contributions to fairs that include
direct and indirect support of fair programs. The Legislature
further finds and declares that local businesses often provide
opportunity purchases to local fairs that, for similar things
available through the state purchasing program, may be acquired
locally at a price equivalent to or less than that available through
a statewide or regional contract.
(b) Notwithstanding any other provision of law, the Department of
Food and Agriculture shall develop criteria to be applied for
opportunity purchases that are made by district agricultural
associations, county and citrus fruit fairs, and the California
Exposition and State Fair, individually or cooperatively.
(c) As used in this section, opportunity purchases means
acquisitions made locally, either individually or cooperatively, at a
price equal to or less than the price available through the office
on or off a statewide or regional contract.
SEC. 29. Section 10325 of the Public Contract Code is amended to
read:
10325. Each quarter, the department shall, upon request, provide
each city, county, city and county, district, local government body,
or public corporation empowered to expend public funds for the
acquisition of consumable goods and other interested parties with a
list of those items available for acquisition under Section 10324.
The department may supplement the quarterly lists with a monthly
supplement of changes, additions and deletions. Terms, conditions,
and specifications shall be provided upon request.
SEC. 30. Section 10326 of the Public Contract Code is amended to
read:
10326. In establishing bid specifications for the acquisition of
motor vehicles and in determining the lowest responsible bidder,
consideration may be given by the state to the probable resale value
of the vehicles as determined by recognized published used car
marketing guides and other established historical evidence of future
used motor vehicle value or, in lieu thereof, by contractual
guarantee of the apparent low bidder that the resale value of the
vehicle will be no less in proportion to bid price than any other
comparable vehicle complying with specifications for which a bid was
received.
SEC. 31. Section 10327 of the Public Contract Code is amended to
read:
10327. Except for motor vehicles described in Section 43805 of
the Health and Safety Code, the provisions of Article 1 (commencing
with Section 43800) of Chapter 4 of Part 5 of Division 26 of the
Health and Safety Code shall govern the acquisition of all motor
vehicles by the state to the extent that the department determines
that these low-emission vehicles are reasonable to meet state needs
pursuant to Section 43804 of the Health and Safety Code.
SEC. 32. Section 10328 of the Public Contract Code is amended to
read:
10328. The bid requirements prescribed in this article are not
applicable to contracts for the acquisition of the following:
(a) Fluid milk and fluid cream, the price of which is established
in accordance with Section 61871 of the Food and Agricultural Code.
(b) Fruits and vegetables procured under contract with growers for
the use of canneries maintained and operated by state agencies, if
these canneries are maintained and operated so that their canned
products will meet the standards prescribed for similar commercially
packed canned products under federal law.
(c) Agricultural surpluses that are available to the state or its
agencies by any governmental agency.
SEC. 33. Section 10330 of the Public Contract Code is amended to
read:
10330. On July 1 of each year, the department shall establish the
minimum dollar level below which authority to acquire goods shall be
delegated to state agencies that meet the requirements of Section
10333. The level established at eight hundred dollars ($800) on
January 1, 1983, and adjusted on July 1, 1983, pursuant to former
Section 14792.1 of the Government Code, shall be retained and
adjusted each July 1 thereafter to reflect, at a minimum, the
percentage change from April 1 of the prior year to April 1 of the
current year in the California Consumer Price Index for all items, as
determined by the California Department of Industrial Relations.
SEC. 34. Section 10331 of the Public Contract Code is amended to
read:
10331. The department shall establish a program for delegating
authority to acquire goods to state agencies that meet the
requirements of Section 10333. Each delegation shall be subject to
annual review by the department. Delegated authority may be
withdrawn at any time the department finds that the state agency to
which authority has been delegated is not in compliance with the
requirements of Section 10333.
SEC. 35. Section 10332 of the Public Contract Code is amended to
read:
10332. Any state agency that receives delegated authority to
acquire goods shall be authorized, at a minimum, to make the
following types of acquisitions:
(a) Acquisitions not exceeding the dollar value established
pursuant to Section 10330.
(b) Acquisitions in any amount of goods available under an
unexpired statewide or regional contract. Acquisitions of goods for
which a valid statewide or regional contract is in effect may not be
made, without the approval of the office, from a supplier other than
the supplier with
whom the state has a valid contract.
(c) Acquisitions in any amount of goods that state agencies are
required, by Section 2807 of the Penal Code, to acquire from the
Prison Industry Authority.
(d) Acquisitions not exceeding fifteen thousand dollars ($15,000)
of goods designated in price schedules that the office has
established with suppliers. Acquisitions not exceeding fifteen
thousand dollars ($15,000) of goods designated in price schedules may
be made from a supplier other than the supplier specified on a price
schedule if another supplier offers the same or equivalent goods at
a price lower than the price established in the price schedule. The
agency shall notify the office prior to making the acquisition. The
acquisition may be made 48 hours after receipt of the notice by the
office unless the office advises the agency that the goods to be
acquired are not the same or equivalent to the goods specified on a
price schedule.
(e) Acquisitions not exceeding fifteen thousand dollars ($15,000)
of goods that are available from the state warehouses but which the
state agency can acquire from another supplier at a price lower than
the price charged by the department. The agency shall notify the
office prior to making the acquisition. The acquisition may be made
48 hours after receipt of the notice by the office unless the office
advises the agency that the goods to be acquired are not the same or
equivalent to the goods available from the state warehouses.
SEC. 36. Section 10333 of the Public Contract Code is amended to
read:
10333. (a) The department shall delegate purchasing authority, as
specified in Section 10332, to any state agency that does all of the
following:
(1) Designates an agency officer as responsible and directly
accountable for the agency's purchasing program.
(2) Establishes written policies and procedures, including
procedures for ensuring and documenting competitive purchasing,
complying with purchasing standards established pursuant to Section
10307, inspecting acquired products for compliance with
specifications, reporting contractor failures to deliver products as
specified in contracts, ensuring that agency contracting personnel
are free from conflict of interest, and complying with other
provisions of law as the department may require.
(3) Establishes procedures for complying with the provisions of
the Small Business Procurement and Contract Act. The procedures
shall include procedures for meeting the goals for the extent of
participation of small businesses in state contracting as established
by the department pursuant to subdivision (a) of Section 14838 of
the Government Code.
(4) Establishes policies for training personnel in purchasing law
and procedures, controlling and reviewing purchasing practices,
auditing purchasing activities, and delegating purchasing authority
within the agency.
(5) Reports the data to the office that the department may
require.
(b) The department shall conduct an audit of each state agency to
which purchasing authority has been delegated at least once in each
three-year period. The authority to acquire goods may be withdrawn
by the department at any time that the department finds that the
state agency to which authority has been delegated is not in
compliance with the requirements of this section.
SEC. 37. Section 10334 of the Public Contract Code is amended to
read:
10334. (a) No state employee shall acquire any goods from the
state, unless the goods are offered to the general public in the
regular course of the state's business on the same terms and
conditions as those applicable to the employee. "State employee," as
used in this section, means any employee of the state included
within Section 82009 of the Government Code, and all officers and
employees included within Section 4 of Article VII of the California
Constitution, except those persons excluded from the definition of
"designated employee" under the last paragraph of Section 82019 of
the Government Code.
(b) Notwithstanding subdivision (a), any peace officer as defined
in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of
the Penal Code, employed by the State of California for a period of
more than 120 months who has been duly retired through a service
retirement or a peace officer retiring from a job-incurred disability
not related to a mental or emotional disorder and who has been
granted the legal right to carry a concealed firearm pursuant to
subdivision (a) of Section 12027 of the Penal Code may be authorized
by the person's department head to purchase his or her state-issued
handgun. Disability retired peace officers need not meet the
120-month employment requirement. The cost of the handgun shall be
the fair market value as listed in the annual Blue Book of Gun Values
or replacement cost, whichever is less, of the handgun issued as
determined by the appointing power, plus a charge for the cost of
handling. The retiring officer shall request to purchase his or her
handgun in writing to the department within 30 calendar days of his
or her retirement date.
(c) Notwithstanding subdivision (a), any peace officer described
in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of
the Penal Code employed by the State of California who is authorized
to carry firearms may purchase his or her state-issued service
firearm if the person's department head directs the department to
change its state-issued service weapon system. The cost of the
service firearm shall be the fair market value as listed in the
annual Blue Book of Gun Values or replacement cost, whichever is
less, of the firearm issued as determined by the department head,
plus a charge for the cost of handling. The requesting officer shall
request to purchase his or her firearm in writing to the department
within 10 calendar days of receiving the new state-issued weapon.
SEC. 38. The heading of Chapter 3 (commencing with Section 12100)
of Part 2 of Division 2 of the Public Contract Code is amended to
read:
CHAPTER 3. ACQUISITION OF INFORMATION TECHNOLOGY GOODS AND
SERVICES
SEC. 39. Section 12100.5 of the Public Contract Code is amended to
read:
12100.5. The Regents of the University of California, the
Trustees of the California State University, and the Board of
Governors of the California Community Colleges shall not be subject
to this chapter except that the trustees shall develop policies and
procedures maintained in its state university administrative manual
and the board shall adopt policies and procedures maintained in its
administrative manual that further the legislative policies for
contracting expressed in this chapter but without the involvement of
the Director of Finance and the Director of General Services or the
Department of Finance and the Department of General Services.
SEC. 40. Section 12100.7 of the Public Contract Code is amended to
read:
12100.7. As used in this chapter:
(a) "Department" means the Department of General Services.
(b) "Director" means the Director of General Services.
(c) "Information technology" shall have the same definition as set
forth in Section 11702 of the Government Code.
(d) "Multiple award schedule" (MAS) is an agreement established
between the General Services Administration of the United States and
certain suppliers to do business under specific prices, terms, and
conditions for specified goods, information technology, and services.
(e) "Multiple award" means a contract of indefinite quantity for
one or more similar goods, information technology, or services to
more than one supplier.
(f) "Office" means the office in the department, by whatever name
it may be called, which is responsible for contracting for goods and
information technology, and is headed by the state procurement
officer.
(g) For purposes of this chapter, "value-effective acquisition"
may be defined to include, but not be limited to, the following:
(1) The operational cost that the state would incur if the bid or
proposal is accepted.
(2) Quality of the product or service, or its technical
competency.
(3) Reliability of delivery and implementation schedules.
(4) The maximum facilitation of data exchange and systems
integration.
(5) Warranties, guarantees, and return policy.
(6) Supplier financial stability.
(7) Consistency of the proposed solution with the state's planning
documents and announced strategic program direction.
(8) Quality and effectiveness of business solution and approach.
(9) Industry and program experience.
(10) Prior record of supplier performance.
(11) Supplier expertise with engagements of similar scope and
complexity.
(12) Extent and quality of the proposed participation and
acceptance by all user groups.
(13) Proven development methodologies and tools.
(14) Innovative use of current technologies and quality results.
SEC. 41. Section 12101 of the Public Contract Code is amended to
read:
12101. It is the intent of the Legislature that policies
developed by the Department of Information Technology and procedures
developed by the Department of General Services in accordance with
Section 12102 provide for:
(a) The expeditious and value-effective acquisition of information
technology goods and services to satisfy state requirements.
(b) The acquisition of information technology goods and services
within a competitive framework.
(c) The delegation of authority by the Department of General
Services to each state agency that has demonstrated to the department'
s satisfaction the ability to conduct value-effective information
technology goods and services acquisitions.
(d) The exclusion from state bid processes, at the state's option,
of any supplier having failed to meet prior contractual requirements
related to information technology goods and services.
(e) The review and resolution of protests submitted by any bidders
with respect to any information technology goods and services
acquisitions.
SEC. 42. Section 12102 of the Public Contract Code is amended to
read:
12102. The Department of Information Technology and the
Department of General Services shall maintain, in the State
Administrative Manual, policies and procedures governing the
acquisition and disposal of information technology goods and
services.
(a) Acquisition of information technology goods and services shall
be conducted through competitive means, except when the Director of
General Services determines that (1) the goods and services proposed
for acquisition are the only goods and services which can meet the
state's need, or (2) the goods and services are needed in cases of
emergency where immediate acquisition is necessary for the protection
of the public health, welfare, or safety. The acquisition mode to
be used and the procedure to be followed shall be approved by the
Director of General Services. The Department of General Services
shall maintain, in the State Administrative Manual, appropriate
criteria and procedures to ensure compliance with the intent of this
chapter. These criteria and procedures shall include acquisition and
contracting guidelines to be followed by state agencies with respect
to the acquisition of information technology goods and services.
These guidelines may be in the form of standard formats or model
formats.
(b) Contract awards for all large-scale systems integration
projects shall be based on the proposal that provides the most
value-effective solution to the state's requirements, as determined
by the evaluation criteria contained in the solicitation document.
Evaluation criteria for the acquisition of information technology
goods and services, including systems integration, shall provide for
the selection of a contractor on an objective basis not limited to
cost alone.
(1) The Department of General Services shall invite active
participation, review, advice, comment, and assistance from the
private sector and state agencies in developing procedures to
streamline and to make the acquisition process more efficient,
including, but not limited to, consideration of comprehensive
statements in the request for proposals of the business needs and
governmental functions, access to studies, planning documents,
feasibility study reports and draft requests for proposals applicable
to solicitations, minimizing the time and cost of the proposal
submittal and selection process, and development of a procedure for
submission and evaluation of a single proposal rather than multiple
proposals.
(2) Solicitations for acquisitions based on evaluation criteria
other than cost alone shall provide that sealed cost proposals shall
be submitted and that they shall be opened at a time and place
designated in the solicitation for bids and proposals. Evaluation of
all criteria, other than cost, shall be completed prior to the time
designated for public opening of cost proposals, and the results of
the completed evaluation shall be published immediately before the
opening of cost proposals. The state's contact person for
administration of the solicitation shall be identified in the
solicitation for bids and proposals, and that person shall execute a
certificate under penalty of perjury, which shall be made a permanent
part of the official contract file, that all cost proposals received
by the state have been maintained sealed and under lock and key
until the time cost proposals are opened.
(c) The acquisition of hardware acquired independently of a system
integration project may be made on the basis of lowest cost meeting
all other specifications.
(d) The 5 percent small business preference provided for in
Chapter 6.5 (commencing with Section 14835) of Part 5.5 of Division 3
of Title 2 of the Government Code and the regulations implementing
that chapter shall be accorded to all qualifying small businesses.
(e) For all transactions formally advertised, evaluation of
bidders' proposals for the purpose of determining contract award for
information technology goods shall provide for consideration of a
bidder's best financing alternatives, including lease or purchase
alternatives, if any bidder so requests, not less than 30 days prior
to the date of final bid submission, unless the acquiring agency can
prove to the satisfaction of the Department of General Services that
a particular financing alternative should not be so considered.
(f) Acquisition authority may be delegated by the Director of
General Services to any state agency which has been determined by the
Department of General Services to be capable of effective use of
that authority. This authority may be limited by the Department of
General Services. Acquisitions conducted under delegated authority
shall be reviewed by the Department of General Services on a
selective basis.
(g) To the extent practical, the solicitation documents shall
provide for a contract to be written to enable acquisition of
additional items to avoid essentially redundant acquisition processes
when it can be determined that it is economical to do so.
Further, it is the intent of the Legislature that, if a state
information technology advisory committee or a state
telecommunications advisory committee is established by the Governor,
the Director of Information Technology, or the Director of General
Services, the policies and procedures developed by the Director of
Information Technology and the Director of General Services in
accordance with this chapter shall be submitted to that committee,
including supplier representatives, for review and comment, and that
the comment be considered by both departments prior to the adoption
of any policy or procedure. It is also the intent of the Legislature
that this section shall apply to the Department of General Services
Information Technology Customer Council.
(h) Protest procedures shall be developed to provide bidders an
opportunity to protest any formal, competitive acquisition conducted
in accordance with this chapter. The procedures shall provide that
protests must be filed no later than five working days after the
issuance of an intent to award. Authority to protest may be limited
to participating bidders. The Director of General Services, or a
person designated by the director, may consider and decide on initial
protests. A decision regarding an initial protest shall be final.
If prior to the last day to protest, any bidder who has submitted an
offer files a protest with the department against the awarding of the
contract on the ground that his or her bid or proposal should have
been selected in accordance with the selection criteria in the
solicitation document, the contract shall not be awarded until either
the protest has been withdrawn or the State Board of Control has
made a final decision as to the action to be taken relating to the
protest. Within 10 calendar days after filing a protest, the
protesting bidder shall file with the State Board of Control a full
and complete written statement specifying in detail the grounds of
the protest and the facts in support thereof.
(i) Information technology goods which have been determined to be
surplus to state needs shall be disposed of in a manner that will
best serve the interests of the state. Procedures governing the
disposal of surplus goods may include auction or transfer to local
governmental entities.
(j) A supplier may be excluded from bid processes if the supplier'
s performance with respect to a previously awarded contract has been
unsatisfactory, as determined by the state in accordance with
established procedures which shall be maintained in the State
Administrative Manual. This exclusion may not exceed 360 calendar
days for any one determination of unsatisfactory performance. Any
supplier excluded in accordance with this section shall be reinstated
as a qualified supplier at any time during this 360-day period, upon
demonstrating to the department's satisfaction that the problems
which resulted in the supplier's exclusion have been corrected.
SEC. 43. Section 12103 of the Public Contract Code is amended to
read:
12103. In addition to the mandatory requirements enumerated in
Section 12102, the acquisition policies developed and maintained by
the Department of Information Technology and procedures developed and
maintained by the Department of General Services in accordance with
this chapter may provide for the following:
(a) Price negotiation with respect to contracts entered into in
accordance with this chapter.
(b) System or equipment component performance, or availability
standards, including an assessment of the added cost to the state to
receive contractual guarantee of a level of performance.
(c) Requirement of a bond or assessment of a cost penalty with
respect to a contract or consideration of a contract offered by a
supplier whose performance has been determined unsatisfactory in
accordance with established procedures maintained in the State
Administrative Manual as required by Section 12102.
SEC. 44. Section 12104 of the Public Contract Code is amended to
read:
12104. Beginning on December 15, 1993, and annually thereafter,
the Department of General Services shall provide a report listing all
acquisitions from the previous fiscal year that were subject to this
chapter and involved the replacement of a computer central
processing unit when only one bid was received and the bid was from
the supplier whose equipment was being replaced. The report shall be
submitted to the chairperson of the committee in each house that
considers appropriations and the Chairperson of the Joint Legislative
Budget Committee.
SEC. 45. Section 12108 of the Public Contract Code is amended to
read:
12108. Until the time that the Department of General Services has
published in the State Administrative Manual the procedures required
in accordance with Section 12102, acquisitions of information
technology goods and services shall be accomplished in accordance
with either existing State Administrative Manual procedures for the
acquisition of information technology goods and services, or Article
2 (commencing with Section 14790) of Chapter 6 of Part 5.5 of
Division 3 of Title 2 of the Government Code, as determined by the
Department of General Services.
SEC. 46. Section 12109 of the Public Contract Code is amended to
read:
12109. The Director of General Services may make the services of
the department under this chapter available, upon the terms and
conditions that may be deemed satisfactory, to any tax-supported
public agency in the state, including a school district, for
assisting the agency in the acquisition of information technology
goods or services.
SEC. 47. Section 12111 of the Public Contract Code is repealed.
SEC. 48. Section 12112 of the Public Contract Code is amended to
read:
12112. Any contract for information technology goods or
services, to be manufactured or performed by the contractor
especially for the state and not suitable for sale to others in the
ordinary course of the contractor's business may provide, on the
terms and conditions that the department deems necessary to protect
the state's interests, for progress payments for work performed and
costs incurred at the contractor's shop or plant, provided that not
less than 10 percent of the contract price is required to be withheld
until final delivery and acceptance of the goods or services, and
provided further, that the contractor is required to submit a
faithful performance bond, acceptable to the department, in a sum not
less than one-half of the total amount payable under the contract
securing the faithful performance of the contract by the contractor.
SEC. 49. Section 12113 of the Public Contract Code is amended to
read:
12113. (a) Notwithstanding any other provision of law, state and
local agencies may enter into agreements to pay for
telecommunications services to be utilized beyond the current fiscal
year. "Telecommunications services" for purposes of this section
shall include, but not be limited to, central office-based leased
communications systems equipped with primary station lines, capable
of receiving in-dialed voice and data communications and capable of
out-dialing voice and data communications and any customer premised
equipment, software and installation costs necessary for utilization
by the state or local agency.
(b) State and local agencies may enter into financing agreements
for the acquisition of telecommunications services whenever the state
or local agency may derive monetary benefit and greater services as
a result of its ability to acquire capital at lower interest cost
than the supplier of those services can provide directly to the
agency or whenever the state or local agency may obtain a reduced
cost of service based on length of agreement if offered by the
supplier of telecommunications service.
(c) Acquisition requirements for financing of telecommunications
goods and services shall be considered to have been met whenever the
financing is within the scope of public sector requests for proposals
or whenever the financing is offered by a sole source provider or
that provider's assignee.
(d) The provisions of this section shall not be construed to alter
or circumvent any existing acquisition procedure or requirement, nor
to alter or circumvent the acquisition authority of any state or
local agency.
SEC. 50. Section 12113.5 of the Public Contract Code is repealed.
SEC. 51. Section 12120 of the Public Contract Code is amended to
read:
12120. The Legislature finds and declares that, with the advent
of deregulation in the telecommunications industry, substantial cost
savings can be realized by the state through the specialized
evaluation and acquisition of alternative telecommunications systems.
All contracts for the acquisition of telecommunications services
and all contracts for the acquisition of telecommunications goods,
whether by lease or purchase, shall be made by, or under the
supervision of, the Department of General Services. All acquisitions
shall be accomplished in accordance with Chapter 3 (commencing with
Section 12100), relating to the acquisition of information technology
goods and services, except to the extent any directive or provision
is uniquely applicable to information technology acquisitions. The
Department of General Services shall have responsibility for the
establishment of policy and procedures for telecommunications. The
Department of General Services shall have responsibility for the
establishment of tactical policy and procedures for data-processing
acquisitions consistent with statewide strategic policy as
established by the Department of Finance. The Department of Finance
shall have review and approval responsibility of data-processing
information and telecommunication acquisitions to assure consistency
with budgetary objectives. The Trustees of the California State
University and the Board of Governors of the California Community
Colleges shall assume the functions of the Department of Finance and
the Department of General Services with regard to acquisition of
telecommunication goods and services by the California State
University and the California Community Colleges, respectively. The
trustees and the board shall each grant to the Department of General
Services, Division of Telecommunications, an opportunity to bid
whenever the university or the college system solicits bids for
telecommunications goods and services.
SEC. 52. Section 2.5 of this bill incorporates amendments to
Section 14838.5 of the Government Code proposed by both this bill and
SB 1049. It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2001, but this
bill becomes operative first, (2) each bill amends Section 14838.5 of
the Government Code, and (3) this bill is enacted after SB 1094, in
which case Section 14838.5 of the Government Code, as amended by
Section 2 of this bill, shall remain operative only until the
operative date of SB 1049, at which time Section 2.5 of this bill
shall become operative.
SEC. 53. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to make the statutory changes necessary to increase small
business participation in state contracts, it is necessary for this
act to take effect immediately as an urgency measure.