BILL ANALYSIS
AB 2161
Page 1
Date of Hearing: April 7, 2010
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
AB 2161 (Fong) - As Introduced: February 18, 2010
SUBJECT : School districts: contracts: formal bids: school
facilities: notices
SUMMARY : Requires a school district letting a school
construction contract to post a notice calling for contract bids
on the district's Internet Web site or through an electronic
portal. Specifically, this bill :
1)Requires the governing board of a school district letting a
contract for the construction of school facilities to post a
notice calling for contract bids on the district's Internet
Web site or through an electronic portal, and requires such
notice to state the work to be done or materials or supplies
to be furnished, as well as the time, place, and Internet Web
site where information will be posted at the bid opening.
2)Requires a school district that does not possess or maintain
its own Web site to post such notices on another Web site or
electronic portal; also requires the district to provide
notice of that Web site at least once a week for two weeks,
following the district's choice of a Web site or portal, in a
newspaper of general circulation in the district, or if there
is no such newspaper, then in some newspaper of general
circulation in the county.
3)Authorizes a district to also provide a notice calling for
contract bids through any other means, including newspapers,
trade or professional journals, Internet Web sites, electronic
mail, or other print publications or electronic means.
4)Authorizes a school district to accept a bid submitted either
electronically or on paper.
EXISTING LAW :
1)Requires the superintendent of each school district to enter
into contracts for and on behalf of the district.
2)Requires the governing board of any school district to
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determine the method of payment for construction contracts,
including progress payments for completed portions of the work
or for materials delivered or stored.
3)Requires that any school district contract become valid or
constitute an enforceable obligation against the district when
that contract has been approved or ratified by the governing
board by a motion of the board duly passed and adopted.
4)Requires the governing board of a school district, for the
purpose of securing bids, to publish a notice calling for
contract bids, at least once a week for two weeks prior to the
due date for such bids, in a newspaper of general circulation
in the district, or if there is no such newspaper, then in
some newspaper of general circulation in the county.
5)Authorizes such notice calling for contract bids to also be
posted on the district's Internet Web site or through an
electronic portal.
6)Requires such notice calling for contract bids to state the
work to be done or materials or supplies to be furnished, as
well as the time, place, and Internet Web site where
information will be posted at the bid opening.
7)Authorizes a school district to accept a bid submitted either
electronically or on paper.
FISCAL EFFECT : Unknown.
COMMENTS : The author makes a clear statement summarizing the
public benefits that this bill intends to generate, when he
states that, "AB 2161 is designed to save school districts money
by ensuring the widest possible pool of bidders on public works
construction projects." Full and fairly distributed information
lies at the heart of the competitive market model; that market
approach, and the resulting competition for school district
contracts, will work to drive costs down for school districts,
and to eliminate the nepotism and cronyism that historically
plagued public contracts. To a large extent, fostering
competition, so as to reduce government contract costs and thus
benefit the state, is the goal of the contracting procedures
that the state requires of public entities.
The intent of this bill is to increase the potential pool of
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aware bidders by requiring school districts to electronically
post bid notices for contracts related to the construction of
school facilities. Contract bid notices are effectively
announcements that the school district will be accepting bids
for a specific contract. Current law requires that any contract
bid notice be published in a newspaper of general circulation,
and authorizes the posting of electronic bid notices, but does
not require it.
There is no firm data on current district practices with respect
to posting bid notices. In 2009 an informal survey conducted by
committee staff suggested that school districts:
1)Have a clear interest in posting their bid notices as widely
as possible in order to generate more competition for those
contracts,
2)Will use whatever means are available for distributing their
bid notices, including the use of a district "bidders list" (a
list of former bidders and firms wishing to bid in the
future), bidders lists made readily available to districts by
county and state governmental agencies, newspapers and other
print media, and district Internet Web sites.
3)Post their bid notices on their own Web sites, and in some
cases, push the bid notice via e-mail to vendors on the
bidders list or use other active electronic approaches.
4)In many cases do not feel that the required newspaper
notification results in a significant number of bids.
Will this bill result in wider electronic distribution of bid
notices? Since districts appear to both be using electronic
means to distribute bid notices and to feel that electronic
distribution serves their interests, it is unclear that a
movement from the current authorization to the proposed mandate
would substantially increase the volume of bid notices posted on
the Internet. In other words, since electronic distribution of
bid notices works, districts may already be using it. At the
same time, if not all districts are currently distributing bid
notices electronically and if electronic distribution increases
bid responses (as some districts have suggested), then requiring
the electronic distribution will lead to wider bidder pools.
Does this bill have a fiscal impact on school districts or the
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state? The primary concern that this proposal generates is that
the change from current law that authorizes Internet posting of
bid notices to the proposed Internet posting requirement would
clearly create a state mandated local program; this is confirmed
by the fact that the Legislative Counsel Bureau has keyed the
bill to indicate that it does create a state mandated local
program. The change from being given an option to
electronically post bid notices to being required to post those
notices creates a requirement for a higher level of service, or
mandate, on the local districts; since this mandate stems from
statutory change and not from requirements created by public
initiative or federal law, the local district costs of meeting
this mandate would be reimbursable by the state. It is unclear
how extensive the administrative costs, and thus the
reimbursements, created by this change would be.
Is there an issue with Internet access created by this bill?
There does not appear to be an issue concerning school district
access to the Internet and thus district's ability to provide
for electronic distribution of bid notices. According to the
California Department of Education, in 2009 all but 31 of the
state's 1,040 school districts and county offices of education
maintained their own Internet Web site; the remaining 31
districts were small school districts that could make use of the
administrative support provided through the county offices of
education. In most proposals related to electronic distribution
of information (e.g., school districts providing notices to
parents and guardians), the Legislature has indicated concern
regarding equal access to that information for all of the
intended recipients, rather than the providers; in the example
that would mean that the Legislature would question whether all
parents and guardians would have access to the Internet or to
electronic mail. In this bill the recipients of the contract
bid notices would be vendors with an interest in knowing about
opportunities to bid on school district contracts. Where there
still might be considerable questions about Internet access for
individual households, especially those with low incomes, there
should be less concern about businesses with an interest in
bidding on government contracts being able to access the
Internet or to otherwise receive an electronically transmitted
contract bid notice. In today's business environment, where
marketing, accounting, billing, correspondence, and submission
of bids is largely done electronically, it would be difficult
for a firm to function without the basic technology necessary to
access the Internet or receive electronic mail. In fact,
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current law allows school districts to determine how they wish
to receive bids on contracts by allowing districts to receive
bids on paper or electronically; it is possible that some school
districts currently only accept electronic bids, and thus
effectively require vendors to have the technology that would be
required to receive electronic bid notices as well.
Should there be any requirement for noticing contract bids, or
should there be complete local choice on how to notify vendors
of contracting opportunities? As noted above, full and fairly
distributed information is what allows competition for contracts
to lower contract costs to school districts, ultimately lower
costs to the state, improve the quality of the bid proposals,
and continue to prevent a return to the nepotism and cronyism
that historically plagued public contracting processes.
Ensuring that districts continue to widely distribute contract
bid notices is most easily done by requiring that distribution
to take place using whatever mechanism provides the widest
distribution at the lowest possible cost to the district.
SB 1464 (Karnette), Chapter 739, Statutes of 2004, authorized
posting of the contract notice on the district's Internet Web
site or through an electronic portal; the Assembly Education
Committee analysis of that bill stated that, "Allowing posting
of bids on Web sites, in addition to existing notice
requirements in newspapers, provides school districts and
bidders the opportunity to become comfortable with electronic
bidding procedures using the latest technology to advertise,
open and post contractor proposals." So the Legislature in 2004
foresaw the move to what was then emerging, and is now current,
technology by allowing and inviting the electronic posting of
bid notices. The requirement proposed in this bill is a logical
next step.
Committee amendments: If this Committee chooses to pass this
bill, then Committee staff recommends the following amendments
1)Eliminate the conflict and lack of clarity that this bill
creates between the current authority to post bids
electronically for all types of contract bids and the proposed
requirement to post bids for construction of school facilities
electronically.
2)Define "construction of school facilities" to mean work, under
a contract involving an expenditure of $15,000 or more, which
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falls within the definition of "public project" as defined in
Public Contract Code.
3)Clarify that "another Web site" includes but is not limited to
a Web site maintained by the county superintendent of schools.
Previous legislation: AB 701 (Fong), held in the Assembly
Appropriations Committee in 2009, would have placed
requirements, similar to those in this bill, on school districts
letting contracts for the purchase of goods or services above
$50,000 in value. AB 490 (Parra), vetoed in 2005, would have
required the notice calling for bids to be mailed to all
construction trade journals for the county or counties in the
attendance area of the district at least 30 calendar days before
the date of opening the bids, if the school district would
incur no publishing costs. SB 1464 (Karnette), Chapter 739,
Statutes of 2004, authorizes school districts to also publish
this notice for bids on the district's Web site or through an
electronic portal, and authorize these districts to accept bids
that were submitted either electronically or on paper. AB 2614
(Levine), vetoed in 2004, would have required the notice to
include the Internet Web site or place where bids will be
housed, posted and opened, and would have allowed a school
district to satisfy the notice requirement by publishing this
information once a week for 2 weeks on the school district's Web
site or through an electronic portal; also would have required
all bids to be opened at the same time and place, and to the
extent possible, on the date designated on the public notice.
REGISTERED SUPPORT / OPPOSITION :
Support
State Building and Construction Trades Council of California
(Sponsor)
Opposition
None on file
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087