BILL ANALYSIS
----------------------------------------------------------
|Hearing Date:June 29, 2005 |Bill No:AB |
| |499 |
----------------------------------------------------------
SENATE COMMITTEE ON GOVERNMENT MODERNIZATION, EFFICIENCY, AND
ACCOUNTABILITY
Senator Liz Figueroa, Chair
Bill No: AB 499 Author: Leno
As Amended: May 10, 2005Fiscal:No
SUBJECT: Public contracts: preferences: small and local
businesses: San Francisco Community College District.
SUMMARY: Establishes a 5-year pilot project authorizing
the San Francisco Community College District (District) to
grant small and local business preferences of up to 5
percent in awarding special contracts for construction, the
procurement of goods, or the delivery of services where
responsibility and quality are equal to the lowest
responsible bidder.
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".
This bill:
AB 499
Page 2
1)Establishes a 5-year pilot project allowing for the
District to provide for a small and local business
preference in construction, the procurement of goods, or
the delivery of services where the responsibility and
quality are equal. Stipulates that the preference shall
be up to 5 percent of the lowest responsible bidder
meeting specifications.
2)Allows the District to establish a subcontracting
participation goal for small and local businesses on
contracts and grant preference, up to a maximum of 5
percent, to those bidders who meet the goal.
3)Requires bidders to make good faith efforts to meet a
subcontracting participation goal, and requires bidders
that fail to do so to demonstrate that they made good
faith efforts to use small and local business
contractors.
4)Defines "small and local business" as it relates to these
provisions.
5)Requires the District to report specified information
relating to the bidders and contracts under the pilot
project to the Legislative Analyst each year, and sunsets
the pilot project on January 1, 2011.
FISCAL EFFECT: This bill has been keyed nonfiscal by
Legislative Counsel.
COMMENTS:
1)Purpose. 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
AB 499
Page 3
District to award such a preference.
2)Arguments in Support. The author and sponsor state that
this bill will 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.
SUPPORT AND OPPOSITION:
Support:
City College of San Francisco (Sponsor)
Opposition:
None on file
Consultant:George Cate