BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2181|
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THIRD READING
Bill No: AB 2181
Author: Hagman (R)
Amended: 5/10/10 in Assembly
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 7-0, 6/22/10
AYES: Wright, Harman, Calderon, Florez, Padilla, Price,
Yee
NO VOTE RECORDED: Denham, Negrete McLeod, Oropeza, Wyland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 61-3, 5/17/10 - See last page for vote
SUBJECT : State Contract Act: contracting by state
agencies
SOURCE : California Department of Corrections and
Rehabilitation
DIGEST : This bill increases the dollar limit for state
agency minor capital outlay projects from $400,000 to
$600,000.
ANALYSIS : The State Contract Act governs contracting
between state agencies and private contractors, and sets
forth requirements for the bidding, awarding, and
overseeing of contracts for projects, which it defines to
include the construction or other improvement to a state
structure or building with a total cost threshold equal to
CONTINUED
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$250,000 for calendar year 2010, as adjusted upward or
downward every two years by the Director of Finance (DOF)
to reflect the percentage change in the annual California
Construction Index (CCI) as used by the Department of
General Services (DGS).
Under the existing State Contract Act, where the nature of
the work in the opinion of the Department of Water
Resources (DWR), DGS, Department of Boating and Waterways
(DBW), California Department of Corrections and
Rehabilitation (CDCR), the Military Department or the
Department of Transportation (CalTrans) is such that its
services in connection with the work are not required, the
applicable department may authorize the carrying out of the
project directly by the state agency concerned if the
estimated cost does not exceed $400,000, except that this
limitation does not apply to a project of a district
agricultural association or the State Lands Commission.
This bill:
1. Increases the dollar limit of specified capital outlay
projects from $400,000 to $600,000 and allows state
agencies to budget those projects as a minor capital
outlay project and carry them out without DGS's
approval.
2. Requires DOF to adjust the minor capital outlay budget
limit every two years to reflect the percentage change
in the annual California Construction Index (CCI) used
by DGS.
3. Requires that whenever statute provides for any project
that does not fall under the jurisdiction of DWR,
Caltrans, DBW, CDCR, or the Military Department, the
project shall be under the sole charge and direct
control of DGS, instead of Caltrans.
Background
State capital outlay projects are budgeted as either major
or minor projects. Major capital outlay projects are those
with a total cost exceeding $400,000. Each major capital
outlay project is budgeted to an agency as a separate line
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item and in one or more phases (e.g., land acquisition,
preliminary plans, working drawings, construction, and
equipment). With the exception of some state agencies that
have delegated authority, major capital outlay projects are
administered by DGS on behalf of the various state
agencies. Minor capital outlay projects are those with
total costs of $400,000 or less, and are typically budgeted
in a lump sum appropriation to the state agency. In
general, state departments can contract directly for minor
capital outlay projects without using the DGS's management
services. The threshold was last raised in 2000 (from
$250,000 to $400,000).
Prior/Related Legislation
AB 31 (Price) Chapter 212, Statutes of 2009, Among other
things, establishes for the calendar year 2010 a cost
threshold of $250,000 for projects covered under the State
Contract Act that would be adjusted every two years to
reflect the percentage change in the annual California
Construction Index as used by DGS.
AB 3020 (Salas) Chapter 106, Statutes of 2008, adds the
Military Department to the list of state departments
authorized to enter into contracts for public works
projects pursuant to the State Contract Act.
AB 2369 (Keeley) Chapter 528, Statutes of 2000, among other
things, increases the minor capital outlay threshold from
$250,000 to $400,000 for which DGS may delegate public
works project management duties to agencies with
demonstrated competence.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/2/10)
California Department of Corrections and Rehabilitation
(source)
Associated Builders and Contractors of California
California Chapter of the American Fence Association
California Fence Contractors' Association
California Military Department
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Engineering Contractors' Association
Flasher/Barricade Association
Marin Builders' Association
OPPOSITION : (Verified 8/2/10)
California Association of Professional Scientists
ARGUMENTS IN SUPPORT : According to a CDCR analysis, due
to the rising costs of construction materials and projects
at correctional facilities, construction costs for many
projects exceed the current minor capital outlay limit. In
2008-09, approximately 28 proposals considered for minor
capital outlay projects exceeded the existing limit due to
the added costs associated with correctional facility
construction. This bill increases the minor capital outlay
limit to $600,000, and direct DOF to henceforth adjust the
limit biennially based on construction cost inflation.
ARGUMENTS IN OPPOSITION : Writing in opposition, the
California Association of Professional Scientists argues
that, "Increasing these cost limits at a time when the
state needs to scrutinize every contract entered into to
save as much money as possible is, in our opinion,
irresponsible."
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Beall, Bill Berryhill,
Blakeslee, Block, Bradford, Buchanan, Carter, Conway,
Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Emmerson, Eng, Feuer, Fletcher, Fuentes, Fuller, Gaines,
Galgiani, Garrick, Gilmore, Hagman, Hall, Harkey,
Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,
Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Miller, Nestande, Niello, Nielsen, Norby, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Skinner,
Smyth, Solorio, Audra Strickland, Torres, Torrico, Tran,
Villines, John A. Perez
NOES: Blumenfield, Chesbro, Swanson
NO VOTE RECORDED: Ammiano, Bass, Tom Berryhill, Brownley,
Caballero, Charles Calderon, Evans, Fong, Furutani,
Jones, Monning, Nava, Silva, Torlakson, Yamada, Vacancy
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TSM:do 8/2/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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