BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           2390 (Buchanan)
          
          Hearing Date:  8/12/2010        Amended: 8/2/2010
          Consultant:  Bob Franzoia       Policy Vote: B,P&ED 5-1  GO  7-1
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          ____
          BILL SUMMARY: AB 2390 would revise public works bidding  
          practices by specifying that public entities shall require the  
          contractor to possess (1) the correct classification of  
          contractor's license at the time the contractor makes a bid or  
          offer to perform the work and (2) current workers' compensation  
          insurance at the same time.  In addition, this bill would  
          require the contractor whose bid was accepted to provide to the  
          awarding authority, within five business days of the notice of  
          the award, each subcontractor's name and business location, the  
          current valid license number issued by the state, and proof of  
          current workers' compensation insurance of each subcontractor  
          that was listed in the contractor's bid.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           Expanded contracting   Estimated $200 to $500 annually  General/
          requirements                                            Special/
                                                                  Bond

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          ____

          STAFF COMMENTS: SUSPENSE FILE.
          
          As noted in a 2008-09 University of California (UC) capital  
          outlay report, UC had 291 active projects totaling $9.2 billion.  
           Bid protests increased 40 percent in 2008-09 due to the  
          competitive nature of contracting and the economy.  Generally,  
          one bid protest results in legal and administrative costs of  
          $25,000.  Even a one percent increase in bid protests would  
          result in significant General Fund costs.

          Caltrans estimates that given the large number of contract it  
          manages annually (666 and 608 in 2008-09 and 2009-10  
          respectively), each with numerous contractors and  










          subcontractors, six staff would be needed.  This projects a  
          workload of about 100 contracts per staff and two days per  
          contract to collect, review, and file the information that would  
          be submitted by subcontractors.  Department of General Services,  
          the other major state contracting entity, has lesser costs.