BILL ANALYSIS
AB 2448
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ASSEMBLY THIRD READING
AB 2448 (Furutani)
As Amended May 24, 2010
Majority vote
HIGHER EDUCATION 9-0 APPROPRIATIONS 16-0
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|Ayes:|Block, Norby, Adams, |Ayes:|Fuentes, Conway, Hill, |
| |Chesbro, Fong, Fuller, | |Bradford, Charles |
| |Galgiani, Portantino, | |Calderon, Coto, Davis, |
| |Ruskin | |Hall, Harkey, Miller, |
| | | |Nielsen, Norby, Skinner, |
| | | |Solorio, Torlakson, |
| | | |Torrico |
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SUMMARY : Authorizes a California Community College district
(CCCD) to award contracts for supplies and materials over
$50,000 to the bidder offering the best value at the lowest
cost. Specifically, this bill :
1)Defines "best value at lowest cost acquisition" as a
competitive procurement process where the award of a contract
for supplies and materials takes into consideration factors
such as the total cost or the operational cost or benefit to
the CCCD, the added value of vendor services as defined in the
request for proposal, the quality and effectiveness of
supplies and materials, the reliability of the vendor's
schedule, product warranties and vendor guarantees, financial
stability and quality assurances of the vendor, vendor
experience and prior consistency, and the economic benefits to
the local community including job creation.
2)Provides that when a CCCD determines that it can expect
long-term savings through the use of life-cycle cost
methodology, through the use of more sustainable products and
through reduced administrative costs, the CCCD may purchase
supplies and materials over $50,000 by contract let in
accordance with best value at the lowest cost acquisition
policies adopted by the CCCD governing board.
3)Requires that best value at lowest cost acquisition policies
consider price and service level proposals that reduce the
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CCCDs overall operating costs, supply and material standards
that support the CCCDs strategic acquisition and management
program direction, procedures for protest and resolution, and
life-cycles of no fewer than three years.
4)Requires the award of a contract be made to the vendor
determined by the CCCD to be the best value to the CCCD based
on the criteria set forth in the request for proposal, and
requires the CCCD to issue a written notice of intent to award
the contract stating in detail the basis of the award.
5)Requires the CCCD to publicly announce the winning contractor,
the winning contractor's price proposal and the factors used
to evaluate the bids, the contractor's rating based on the
evaluation factors, and a summary of the rationale for the
contract award.
6)Requires CCCDs to ensure a fair and equitable opportunity to
compete for, and participate in, CCCD contracts, and to ensure
against discrimination in the award and performance of
contracts.
7)Requires a CCCD that elects to purchase supplies and materials
through the best value acquisition policies to submit a
report, as outlined, to the CCC Chancellor's Office by January
1, 2015.
8)Sunsets all of the aforementioned provisions on January 1,
2016.
9)Allows the governing board of a CCCD to authorize a contractor
to proceed with one or more changes or alterations to a
contract without securing bids if the cost of all changes or
alterations does not exceed defined amounts.
EXISTING LAW requires a CCCD to let any contract involving an
expenditure of more than $50,000 for purchases of equipment,
materials, supplies, repairs, and services, other than
construction services, to the lowest responsible bidder or to
reject all bids. Requires any single change or alteration in
certain contracts with a CCCD to be in writing, and allows the
governing board of the CCCD to authorize the contractor to
proceed without securing bids if the cost does not exceed 10% of
the original contract price.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, any costs to the CCCDs would be non-reimbursable, as
the bill is discretionary.
COMMENTS : Purpose of this bill: According to the author,
lowest price does not always guarantee cost effectiveness, and
it does not account for what may be the most advantageous for
CCCD needs. CCCDs need the authority to make assessments based
on criteria in addition to price that will lead to the best
value ultimately for the CCCD's investment.
Best value procurement in California: AB 793 [(Cox) Chapter
665, Statutes of 2001] authorized Municipal Utility Districts
(MUDs) to use best value procurement for supplies and materials
purchases over $50,000. In 2006, the Sacramento Municipal
Utility District (SMUD) reported that since 1999 it had awarded
34 contracts, collectively worth over $35 million, using the
best value method. For 13 contracts totaling $27 million, SMUD
attributed $8 million in financial benefits to the use of a best
value procurement process. According to the Legislative
Analysts Office (LAO) report on the use of the best value
procurement in MUDs, while low cost purchasing still has an
important role in government purchasing, getting the best value
for a product or service does not always mean choosing the
lowest bidder. LAO indicated that, based on the limited
experience to date, best value procurement authority appeared to
provide MUDs with an important procurement tool.
Prior legislation: AB 2550 (Furutani, 2008) was substantially
similar to this bill. AB 2550 was approved by the Legislature
and subsequently vetoed by the Governor. In his veto message,
the Governor noted concerns that the legislation could allow
subjective methods to govern the bidding process for procurement
of supplies and materials with a relatively short life-cycle,
which could be more open to manipulation and abuse in the bid
selection process. To address these concerns, the author added
several clarifications to the definition of best value,
including a requirement that best value policies consider a
life-cycle of no fewer than three years.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960 FN:
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