BILL ANALYSIS
SB 694
Page 1
Date of Hearing: June 22, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
SB 694 (Correa) - As Amended: May 18, 2010
SENATE VOTE : 36-0
SUBJECT : Public contracts: public works: competitive bidding:
procedures.
SUMMARY : Extends the amount of time for a request for review
from the California Uniform Construction Cost Accounting
Commission (Commission) and for the Commission to review and act
on disputes over whether local agencies have followed the
Uniform Public Contract Construction Cost Accounting Act (Act).
Specifically, this bill :
1)Extends the amount of time that the Commission must review and
act on disputes over whether local agencies have followed the
Act:
a) For complaints which allege that local officials
rejected all bids and instead claimed that the local agency
can do the work less expensively, this bill extends the
time limit from 30 to 45 days. Prohibits a public agency
from proceeding with a project until a final decision is
received by the Commission; and,
b) For complaints which allege that local officials have
either exceeded the force accounts or improperly classified
the work as maintenance, this bill extends the time limit
from 30 to 90 days.
2)Extends the date that the Commission must receive requests to
review disputes in writing, as follows:
a) From five to eight business days, postmarked by
certified or registered mail following the date the public
agency has rejected all bids for projects because the
agency can do the work less expensively; and,
b) From five to eight days, following a formal complaint by
an interested party to the public agency, for projects in
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which complainants allege that local officials have either
exceeded the force accounts or improperly classified the
work as maintenance.
EXISTING LAW :
1)Establishes the Act and authorizes public agencies to use
public employees on construction projects costing up to
$30,000 and informal competitive bidding procedures for
construction projects costing up to $125,000, if the agencies
voluntarily agree to the cost accounting procedures set forth
under the Act.
2)Establishes the Commission, comprised of 14 members, to
administer the Act.
3)Requires the Commission to review the accounting procedures of
any participating public agency when an interested party
presents evidence that construction was improperly undertaken
in violation of project cost limits.
4)Requires that written requests for Commission reviews be
submitted by certified or registered mail to the Commission
and be postmarked within five days from the date the local
public agency has rejected bids for projects because the
agency can do the work less expensively.
5)Requires that written requests for Commission reviews be
received within five days from the date the public agency has
rejected bids for projects because the agency can do the work
less expensively.
6)Prohibits a public agency that has violated the Act three
times within a 10-year period, from using the Act for five
years.
FISCAL EFFECT : Unknown. This bill has been keyed non-fiscal.
COMMENTS :
Purpose of this bill . According to the author's office, "This
bill extends the time limit for the Commission to review and act
on disputes over whether local agencies have followed the Act.
For complaints which allege that local officials rejected all
bids and instead claimed that the agency can do the work less
SB 694
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expensively, this bill extends the time limit from 30 to 45
days. For complaints which allege that local officials have
either exceeded the force accounts or improperly classified the
work as maintenance, the bill extends the time limit from 30
days to 90 days."
On a separate bill provision, the author's office states, "Five
business days does not provide a fair and reasonable amount of
time for an objection to be filed with both the public entity
and the Commission. With many [public] entities meeting on
Wednesday evening, a complainant is unable to obtain documents
from the necessary parties, review the documents and send a
complaint by registered or certified mail?.Complaints are filed
immediately to meet the deadline and then must be withdrawn
after the complainant has had proper time to review the
information and see that no commission review is needed. This
change would save public agencies and the Commission time and
money."
Background . Force account limits identify the maximum project
size that a local public agency may undertake with its own
employees. Above that limit, the project must be put out for
competitive bidding.
Current law requires local agencies to observe the force account
limits in the Public Contract Code. Cities, in general, have a
force account limit of $5,000, and counties have a force account
limit that starts at $4,000, but increases with population size.
Redevelopment agencies have a force account limit of $5,000.
School districts and community college districts have a force
account limit of 350 work hours if their average daily
attendance is less than 35,000, which increases to 750 work
hours or $21,000 in materials if average daily attendance is
above 35,000.
Established in 1983, the Act increases the force account limits
for local agencies that choose to participate in the Act and use
the accounting procedures set forth by the Commission in its
cost Accounting Policies and Procedures Manual.
For example, projects costing up to $30,000 can be performed by
employees of a public agency - this bid limit is known as the
"force account limit." Projects costing up to $125,000 can be
let by informal bidding procedures, and projects costing over
$125,000 must be performed by formal bidding procedures. More
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projects are completed in a timely manner as a result of the
streamlined awards process and the reduction in paperwork.
The Commission, comprised of 14 members from the public and
private sectors, reviews the informal bid limits every five
years for inflation adjustments and determines whether the
limits should be increased. The last limit increases were made
on July 1, 2005.
Existing law requires the Commission to review and act on a
consumer complaint within 30 days. If the Commission finds
that a local agency has violated the Act three times within a
10-year period, it can prohibit that agency from using the Act
for five years.
Previous Legislation . AB 2372 (Pavley), Chapter 192, Statutes
of 2006, prohibits a public agency that has violated the Act
three times within a 10-year period, from using the Act for five
years.
REGISTERED SUPPORT / OPPOSITION :
Support
Engineering Contractors' Association (sponsor)
California Fence Contractors' Association
Flasher/Barricade Association
Marin Builders' Association
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301