BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1444|
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THIRD READING
Bill No: AB 1444
Author: Garrick (R)
Amended: 4/20/09 in Assembly
Vote: 21
SEN. GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 7/8/09
AYES: Wright, Harman, Benoit, Calderon, Denham, Florez,
Negrete McLeod, Padilla, Price, Wyland, Yee
NO VOTE RECORDED: Oropeza, Wiggins
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 77-0, 5/21/09 (Consent) - See last page
for vote
SUBJECT : Disposition of state property: services
contracts
SOURCE : Department of General Services
DIGEST : This bill authorizes the Department of General
Services to advertise and award service contracts related
to the disposition of state-owned real property, and to
establish a list of prequalified firms that may enter into
such contracts.
ANALYSIS : Current law authorizes the Department of
General Services (DDGS) to take various actions with
respect to the sale, lease, and disposition of state
properties, including entering into lease purchase
CONTINUED
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agreements with state agencies for specified state
properties.
Under current law, the state is authorized to utilize
multiple awards, including Federal General Service
Administration (GS) Multiple Awards Schedules (MAS) and
master agreements or contracts for goods, information
technology, services, or consulting services.
Existing law authorizes state agencies, in exercising their
contracting authority delegated by DGS, to contract with
suppliers who have MAS with the Federal GSA on the same
terms, conditions, and prices if the supplier is agreeable.
The state MAS process is referred to as the California
Multiple Awards Schedules (CMAS).
Current law authorizes DGS to require vendors to be
prequalified prior to placing bids in a reverse auction.
Current law, The Small Business Procurement and Contract
Act, permits a state agency a contract for goods, services,
or information technology with a value of between $5,000
and $100,000 to a small business without complying with
competitive bidding requirements.
The California Constitution requires proceeds from the sale
of all surplus properties be used to pay the principal and
interest on the bonds authorized under the Economic
Recovery Bond Act. After those specific bonds are retired,
money from the sale of surplus properties must be placed in
the Special Fund for Economic Uncertainties.
Existing law requires authorization by the Legislature
prior to the disposition by sale or otherwise of state land
reported by a state agency in excess of its foreseeable
needs.
This bill:
1.Defines "qualified firm" as an individual, firm, or
combination of firms and individuals having appropriate
expertise and knowledge related to due diligence
investigations, land use planning, real estate
development, entitlement, appraisals, real estate
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economics and valuation, marketing, public relations,
auctioning, and other related matters involved in the
disposal, reuse, leasing, and sale of real property.
2.Defines "prequalified list" as a list of firms that
possess the qualifications established by DGS to perform
specific types of services needed.
3.Establishes a process to advertise and award contracts,
which includes soliciting statements of qualifications of
interested firms and making announcements through the
State Contracts Registrar and applicable publications.
4.Requires DGS to use the prequalified list of a particular
category (or profession) to find at least three firms
with sufficient staffing available for the project. If
the first category does not yield three results, DGS may
utilize other categories that can provide the desired
services.
5.Requires DGS to solicit cost proposals form the three
identified firms available and originating from the
prequalified list, and to negotiate a contract with the
best qualified firm at compensation deemed fair and
reasonable to the State.
6.Requires DGS to negotiate a contract with the next
qualified firm if DGS is unable to negotiate a successful
contract with the identified qualified firm. Also,
permits DGS to remove a qualified firm from the
prequalified list if contract negotiations are
unsuccessful on three separate occasions.
7.Requires DGS to update prequalified lists at least every
two years from the date the lists are established to
include additional firms. Also, allows DGS to add
qualified firms more frequently than every two years.
8.Makes it explicit that contracts for services that DGS
elects to advertise and award in accordance with the
provisions of this bill are not subject to existing
provisions of law applicable to Personal & Consulting
Services Contracts (Article 4, commencing with Section
10335 of the Public Contracts Code) and shall not include
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services defined in Chapter 10, commencing with Section
4525 of the Government Code (e.g., contracts with private
architects, engineering, land surveying and construction
project management firms).
Comments
According to the author's office, this bill is intended to
allow DGS 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 program.
For larger, more valuable properties, DGS utilizes an
entitlement enhancement process to increase the value.
These types of properties have significant revenue
potential when they are reasoned through the local
government entitlement process (e.g., zoning, general plan
amendments and specific plan processes). DGS uses
specialized consultants to perform the preliminary
entitlement work, prior to placing the real property on the
real estate market.
This process eliminates much of the risk for the buyer
since the buyer and DGS already understand the level of
entitlements before close of escrow on the sale of the
property. A buyer is inclined to pay a higher price for
the property to the State for the reduced risk resulting
from this process.
DGS states that this 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 process used
to hire an external consultant can take three to six
months, and costs approximately $25,000 to $50,000 in staff
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resources. DGS claims that using a prequalified list will
reduce this administrative cost to approximately $5,000.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/18/09)
Department of General Services
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Price, Ruskin, Salas, Silva, Skinner,
Smyth, Solorio, Audra Strickland, Swanson, Torlakson,
Torres, Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Fuentes, Nava, Saldana
TSM:cm 8/18/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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