BILL ANALYSIS
AB 499
Page 1
Date of Hearing: May 3, 2005
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE ECONOMY
Juan Arambula, Chair
AB 499 (Leno) - As Amended: April 21, 2005
SUBJECT : Public contracts: preferences: small and local
businesses: San Francisco Community College District.
SUMMARY : Creates a limited-term pilot project authorizing the
San Francisco Community College District (District) to grant
bidding preferences of up to 5% in the award of specified
contracts to District-defined "small and local businesses" and
other businesses meeting established "small and local business"
subcontracting goals. Specifically, this bill :
1)Allows the District to award a "small and local business"
bidding preference of up to 5% of the lowest responsible bid
on specified contracts.
2)Permits the District to establish a subcontracting
participation goal for "small and local businesses" and grant
a maximum 5% preference to bidders meeting this goal.
3)Enables the District to require all bidders engage in "good
faith" attempts to attain the "small and local business"
subcontracting participation goal.
4)Requires the District to define the term "small and local
business" for each contract in which the "small and local
business" bidding preference will be offered and requires this
definition be issued prior to the initial solicitation for
each bid utilizing this provision.
5)Limits the District from defining the term "local" as being a
geographical area smaller than the boundaries of the District
and no greater than the area comprising the member counties of
the Association of Bay Area Governments, which include
Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo,
Santa Clara, Solano, and Sonoma Counties.
6)Requires the District provide an annual report to the
Legislative Analyst for each of the five years of the pilot
project. The report shall include the following:
AB 499
Page 2
a) Total number of bidders for each contract in which this
bill's provisions were offered;
b) Total number of bidders for each contract that qualified
for the existing small business preference allowed by local
agencies under current law;
c) Total number of bidders for each contract that qualified
for the "small and local business" preference created by
this bill;
d) Total number of contracts bid in which the existing small
business preference allowed by local agencies under current
law was the determinant factor in the contract award; and
e) Total number of contracts bid in which the preference
allowed in this bill was the determinant factor in the
contract award.
7)Sunsets this pilot project after a period of five years on
January 1, 2011.
EXISTING LAW :
1)Allows local agencies to grant bidding preferences of up to 5%
in the award of specified contracts to defined "small
businesses" and other businesses meeting established "small
business" subcontracting goals. The preference is up to 5% of
the lowest responsible bid.
2)Permits local agencies to establish a subcontracting
participation goal for "small businesses" and grant a
preference to bidders meeting this goal.
3)Enables local agencies to require bidders engage in "good
faith" attempts to attain the "small business" subcontracting
participation goal.
4)Requires each local agency awarding the "small business"
preference to define the term "small business".
FISCAL EFFECT : Unknown
COMMENTS :
AB 499
Page 3
1)Purpose of the Bill : According to the author, the bill
initially arose from a specific issue following passage of a
local bond measure to fund capital improvements at a community
college campus. The author states even though the bond was
passed as a local measure and, as a result, financed locally,
the community college district was not able to offer any
preferences to local businesses when soliciting and awarding
bids.
The author asserts this bill gives local governments the
option to keep local money in their community, and it is
modeled on the existing small business preference. The bill
does not require the District to use the local preference, but
authorizes the District to award such a preference.
2)Arguments in Support : This bill would allow preferences in
the awarding of contracts to local businesses by the District.
The current law only allows for preferences in contract
awards by local agencies be given on the basis of being a
small business.
The bill could:
a) Benefit the District because there would be an increased
ability to do business with people from the local community;
b) Benefit the local economy by keeping local bond/tax
dollars in the community;
c) Help maximize the impact of capital projects on the local
job market; and
d) Assist businesses owned by women and minorities in urban
areas to get public works contracts because they tend to
have small businesses.
1)Related legislation : AB 348 (Arambula) authorizes the
Department of General Services (DGS) to accept certification
of a small business made by a local agency if it determines
the local agency has applied similar certification criteria
and review processes to those applied by DGS. (Pending in
Senate Rules awaiting policy committee assignment.)
AB 409 (Yee) expands from 5% to 15% the maximum allowable
bidding preference for certified small business bidding on
AB 499
Page 4
state contracts. (Pending in Assembly Appropriations)
AB 410 (Yee) creates a 10% bidding preference for disabled
veteran business enterprises in specified contracts for goods
and services with state agencies. (Failed Passage in Assembly
Veterans Affairs; Granted Reconsideration)
AB 854 (Bass) authorizes the Department of General Services
(DGS) to accept certification of a small business made by a
local agency if it determines the local agency has applied
similar certification criteria and review processes to those
applied by DGS. (Held Under Submission in Assembly Jobs,
Economic Development, and the Economy)
SB 115 (Florez) identifies the Department of General Services
(DGS) as the administrative agency of the Disabled Veteran
Business Enterprise Program except where DGS is conflicted out
of that role due to its other administrative actions. This
bill also establishes DGS' duties as administrative agency and
goals for the Disabled Veteran Business Enterprise Program.
Additionally, SB 115 requires the Small Business Advocate
within DGS to provide services to both certified small
businesses and disabled veteran business enterprises.
(Pending in Senate Appropriations)
SB 320 (Machado) prohibits a business from applying to become
a disabled veteran business enterprise for three years if the
applicant business has received an adverse action in
previously being or attempting to become a certified disabled
veteran business enterprise. This bill also establishes
procedures for bidders and awarding departments to ensure
compliance in contract award and execution. (Pending in
Senate Appropriations)
SB 828 (Maldonado) exempts certain business requirements and
corresponding certifications for state contracts of $5,000 or
less. (Pending in Senate Government Modernization,
Efficiency, and Accountability)
REGISTERED SUPPORT / OPPOSITION :
Support
City College of San Francisco, Office of the Chancellor
(Sponsor)
AB 499
Page 5
Opposition
None on file.
Analysis Prepared by : Tom Higgins / J., E.D. & E. / (916)
319-2090