BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
116 (Beall)
Hearing Date: 06/29/2009 Amended: 04/21/2009
Consultant: Mark McKenzie Policy Vote: T&H 10-1
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BILL SUMMARY: AB 116 would revise the procurement requirements
for the purchase of supplies, equipment, and materials by the
Santa Clara Valley Transportation Authority (VTA), the
Alameda-Contra Costa Transit District (ACCTD), the San Mateo
County Transit District (SAMTRANS), and the Golden Gate Bridge,
Highway and Transportation District (GG District).
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Procurement potential costs likely offset by
savingsSpecial*/
--------(see staff comments)-------
Local
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* Public Transportation Account
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STAFF COMMENTS:
Existing law, with respect to the purchase of supplies,
equipment, and materials that exceed $25,000 by VTA, ACCTD,
SAMTRANS, and that exceed $20,000 by the GG District, requires
the contract to be awarded to the lowest responsible bidder
after a competitive procurement process. SAMTRANS is excluded
from this process in emergencies, as specified, and the
governing board of SAMTRANS is authorized to allow the general
manager to act on its behalf if the contract is $50,000 or less.
AB 116 would make the following changes to the procurement
requirements for purchases of supplies, equipment, and materials
by these entities:
Authorizes the award contracts with a value greater than
$100,000 on the basis of either lowest responsible bidder or
"best value," defined as the overall combination of quality,
price, and other elements of a proposal that, when considered
together, provide the greatest overall benefit in response to
the bid solicitation documents.
Requires, to the extent practicable, VTA, ACCTD, the GG
District, and SAMTRANS to obtain a minimum of three
quotations, either written or oral, that permit price
comparison for contracts with a value of $2,500 to $100,000.
These contracts would still go to the lowest responsible
bidder, but the bill relieves the entities from conforming
with formal bidding requirements.
Requires all bid notices to be published on the agencies'
websites.
Deletes the authority of the general manager of SAMTRANS to
act on behalf of the board for contracts of $50,000 or less.
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AB 116 (Beall)
Staff notes that this bill affords similar procurement options
to VTA, ACCTD, SAMTRANS, and the GG District as those that are
provided in current law for the Bay Area Rapid Transit District,
the Los Angeles Metropolitan Transportation Authority, and the
San Diego Metropolitan Transit System.
Staff notes that for contracts with a value of less than
$100,000, this bill would not necessarily authorize sole source
procurement of supplies, equipment, and materials. The bill
does establish a less formal, but still competitive process for
the procurement of relatively small contracts. This process
would result in moderate cost savings due to decreased
advertising, reprographics, and staff costs for these smaller
contracts.
Staff notes that by allowing these entities to procure supplies,
equipment, and materials by criteria other than just price, the
bill could result in higher costs for certain contracts. These
costs could be offset by longer term savings if items are
procured using best value, to the extent that factors such as
life-cycle costs, quality, and other intangible benefits (the
inclusion of warranties, training, and maintenance for certain
items), when considered together with price, result in a greater
overall benefit. In addition, use of best value procurement
methods could increase the ability of these entities to
participate in regional cooperative purchasing agreements,
resulting in benefits in economies of scale.
This bill is substantially similar to AB 117 (Beall), which was
vetoed by the Governor last year because it was not perceived as
a priority in light of the delayed passage of the 2008-09 Budget
Act.