BILL ANALYSIS
AB 2448
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CONCURRENCE IN SENATE AMENDMENTS
AB 2448 (Furutani)
As Amended August 11, 2010
Majority vote
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|ASSEMBLY: |63-0 |(May 28, 2010) |SENATE: |31-4 |(August 19, |
| | | | | |2010) |
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Original Committee Reference: HIGHER ED.
SUMMARY : Authorizes a California Community College district
(CCCD) to, until January 1, 2016, award contracts for supplies
and materials over $50,000 to the bidder offering the best value
at the lowest cost (best value contracting). 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.
The Senate amendments require CCCDs, when awarding contracts
through best value contracting, to announce, among other
information, the winning contractor's price proposal, the
overall combined rating system on the request for proposal
evaluation factors, and a summary of the rationale for the
contract award. Require that participate in best value
contracting to submit specified information to the CCC
Chancellor's Office by January 1, 2013, and require the
Legislative Analyst to report by January 1, 2015 specific
information and findings regarding the use of best value
contracting by CCCDs.
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.
AS PASSED BY THE ASSEMBLY , this bill required CCCDs
participating in best value contracting to submit specific
AB 2448
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information to the CCC Chancellor's Office.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by
Legislative Counsel.
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) of 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
AB 2448
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FN: 0005888