BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1444
                                                                  Page  1

          Date of Hearing:   May 13, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                   AB 1444 (Garrick) - As Amended:  April 20, 2009 

          Policy Committee:                              Business and  
          Professions  Vote:                            10-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill authorizes the Department of General Services (DGS) to  
          advertise and award service contracts, pursuant to a new  
          specified process, for the disposition of state-owned real  
          property, and to establish a list of prequalified firms that may  
          enter into such contracts, and to update the list at least every  
          two years.

           FISCAL EFFECT  

          Minor costs for the department to establish lists of qualified  
          firms, based on the specified process, and to renew the list  
          every two years.  These costs will be much more than offset by  
          savings in the contract award process by using the prequalified  
          list of firms.  Savings could total $200,000 or more annually.

           COMMENTS  

           Purpose  .  This bill allows DGS (the sponsor) to establish lists  
          of prequalified external consultants who can perform the various  
          services DGS typically utilizes as part of its real property  
          disposition program.  According to DGS, following legislative  
          authorization to sell state-owned property, the state can sell  
          the property either "as is" or "subject to" entitlements.  DGS  
          utilizes a variety of contracted professional consultants such  
          as real estate economists, marketing consultants, and  
          entitlement specialists, in its real property sales and property  
          enhancement programs.  For larger, more valuable properties, DGS  
          utilizes an entitlement enhancement process to increase the  
          value. 
           








                                                                 AB 1444
                                                                  Page  2

          DGS states that the bill would probably affect approximately  
          10-12 contracts each year.  In addition, there are only a select  
          number of specialized consultants who would meet the criteria  
          for the type of services DGS is looking for and who would become  
          eligible on the prequalified list.  The Request for Proposal  
          (RFP) process used to hire an external consultant can take three  
          to six months, and costs approximately $25,000-$50,000 in staff  
          resources.  DGS claims that using a prequalified list will  
          reduce this administrative cost to approximately $5,000.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081