BILL ANALYSIS
AB 1047
Page 1
Date of Hearing: April 17, 2007
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mike Eng, Chair
AB 1047 (Houston) - As Introduced: February 22, 2007
SUBJECT : Uniform Public Construction Cost Accounting Act:
notification.
SUMMARY : Requires the Controller to send a notice to public
agencies that details the existence of, and the benefits
available to, public agencies under the Uniform Public
Construction Cost Accounting Act (Act).
EXISTING LAW generally requires, with many specific exceptions,
public agencies to obtain competitively bid contracts for
construction projects that cost more than $15,000. This amount
varies depending on the public agency and whether it is a city,
county, special district, or school district, and other
variables. This limit is commonly referred to as the "force
account," whereby a public agency may use its own forces (i.e.,
public employees) as long as the amount of the contract does not
exceed the limit.
Existing law authorizes public agencies to use their own
employees on construction projects that cost up to $30,000, and
use informal competitive bidding procedures for construction
projects that cost up to $125,000, if they agree to the cost
accounting procedures set forth under the Act.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office: "In
2006, Assemblyman Houston carried AB 350, which raised the
threshold at which fire protection districts with budgets under
$1 million must award contracts for special services through
competitive bidding from $10,000 to $25,000.
"During debate on this issue, Houston pledged to work with other
interested parties to find a way to increase awareness of the
Cost Accounting Act, without having to do special carve outs for
different agencies and interests.
AB 1047
Page 2
"In 1983, the Uniform Public Construction Cost Accounting Act
was created, which allows public agencies to work up to $30,000
with its own workforce if the agency elects to follow cost
accounting procedures set forth. Very few agencies actually know
of the existence of this program, however, and it isn't used
very frequently. Instead, many agencies feel they need special
legislation to achieve the same results. This bill can be
characterized as an awareness campaign to help public agencies
understand the availability and benefits of the Cost Accounting
Act."
Background . The Act was created as a voluntary program intended
to provide flexibility in the execution of public works
projects, accelerate project delivery, and provide uniformity in
the cost accounting standards for construction contracts that
are used to determine when projects must be put out for bid
(force account limit). The Act allows public agencies to use
their own employees for construction projects that cost up to
$30,000 if they agree to the project cost accounting standards
prescribed by the Act. If they do not agree to the standards
prescribed by the Act, public agencies are required to let out
for bid construction projects that will cost more than $15,000,
although this amount can vary widely depending on the public
agency, whether it is a city, county, special district, school
district, etc. The Act also allows participating public
agencies to use informal competitive bidding procedures for
projects that will cost up to $125,000. Generally, public
agencies that do not participate under the provisions of the Act
may use informal bidding procedures for contracts that cost up
to their force account limit.
Support . The Construction Industry Force Account Council
writes: "The creation of the Uniform Public Construction Cost
Accounting Act of 1983 was to provide a method which allowed
public agencies to perform public works projects with their own
forces, if the agencies elect to follow the cost accounting
procedures set forth by the Commission created within the Act.
The intent of these procedures is to allow an "apples-to-apples"
cost comparison between the public and private sector to justify
allowing public agencies to do their own work rather than put
the projects out to bid as required by the Public Contract
Code."
The State Building and Construction Trades, California State
Association of Electrical Workers, California State Pipe Trades
AB 1047
Page 3
Council, and Western States Council of Sheet Metal Workers,
assert: "Agencies that participate in this voluntary program
have an added incentive to complete maintenance and low-cost
building projects using their own workforce without the
extensive bidding process that accompanies larger construction
projects. AB 1047 promotes the value of this program by raising
the awareness of public agencies about the benefits and
cost-effectiveness through a yearly notice sent by the State
Controller."
REGISTERED SUPPORT / OPPOSITION :
Support
Air Conditioning & Refrigeration Contractors Association
Air Conditioning Sheet Metal Association
American Fence Contractors' Association, California Chapter
California Chapters of the National Electrical Contractors
Association
California Fence Contractors' Association
California Legislative Conference of the Plumbing, Heating, and
Piping Industry
California State Association of Electrical Workers
California State Pipe Trades Council
Construction Industry Force Account Council
Engineering Contractors' Association
Flasher Barricade Association
Marin Builders Exchange
State Building and Construction Trades Council
Western States Council of Sheet Metal Workers
Opposition
None on file.
Analysis Prepared by : Ross Warren / B. & P. / (916) 319-3301