BILL ANALYSIS
SB 1341
Page 1
Date of Hearing: June 28, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 1341 (Price) - As Amended: June 15, 2010
SENATE VOTE : 28-0
SUBJECT : Los Angeles County Metropolitan Transportation
Authority: contracting.
SUMMARY : Enacts provisions for the Los Angeles County
Metropolitan Transportation Authority (Metro) relative to
preferences in contracting for small business enterprises under
specified conditions. Specifically, this bill :
1)Allows Metro, on contracts above $100,000, to award contracts
to the lowest responsible bidder, except as to contracts for
professional services involving private architectural,
landscape architectural, engineering, environmental, land
surveying, or construction management, to do any of the
following in facilitating contract awards to small businesses:
a) Provide for a small business preference in construction,
the construction component of
a design-build team, the procurement of goods, or the
delivery of services, and provides that the preference
shall be five percent (5%) of the lowest responsible bidder
meeting specifications that provide for small business
participation;
b) Establish a subcontracting participation goal for small
businesses on contracts financed with nonfederal funds and
grant a preference of 5% to the lowest responsible bidders
who meet the goal; or,
c) Require bidders to make a good faith effort prior to the
time bids are opened, to comply with the goals and
requirements established by Metro relating to participation
in the contract by small businesses.
2)Provides that the following shall apply to bidders:
a) The bidder attended any presolicitation or prebid
meetings that were scheduled by Metro to inform all bidders
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of the small business enterprise program requirements for
the project for which the contract will be awarded, and
provides that Metro may waive this requirement if it
determines that the bidder is informed as to those program
requirements;
b) The bidder identified and selected specific items of the
project for which the contract will be awarded to be
performed by small business enterprises to provide an
opportunity for participation by those enterprises;
c) The bidder advertised, not less than 10 calendar days
before the date the bids are opened, in one or more daily
or weekly newspapers, trade association publications or
trade-oriented publications, trade journals, or other
media, specified by Metro for small business enterprises
that are interested in participation in the project, and
provides that this only applies if Metro gave public notice
of the project not less than 15 calendar days prior to the
date the bids are opened;
d) The bidder provided written notice of his or her
interest in bidding on the contract to the number of small
business enterprises required to be notified by the project
specifications not less than 10 calendar days prior to the
opening of bids, and provides that Metro shall make
available to the bidder not less than 15 calendar days
prior to the date the bids are opened a list or source of
lists of enterprises which are certified by Metro as small
business enterprises;
e) The bidder followed up initial solicitations of interest
by contacting the enterprises to determine with certainty
whether the enterprises were interested in performing
specific items of the project;
f) The bidder provided interested small business
enterprises with information about the plans,
specifications, and requirements for the selected
subcontracting or material supply work;
g) The bidder requested assistance from small business
community organizations; small business contractor groups;
local, state, or small business assistance offices; or,
other organizations that provide assistance in the
recruitment and placement of small business enterprises, if
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any are available;
h) The bidder negotiated in good faith with the small
business enterprises, and did not unjustifiably reject as
unsatisfactory bids prepared by any small business
enterprises, as determined by Metro;
i) Where applicable, the bidder advised and made efforts to
assist interested small business enterprises in obtaining
bonds, lines of credit, or insurance required by Metro or
contractor; and,
j) The bidder's efforts to obtain small business enterprise
participation could reasonably
be expected by Metro to produce a level of participation
sufficient to meet the goals and requirements of Metro.
3)Defines "small business enterprise" to mean a business
enterprise that is classified as a small business under United
States Small Business Administration rules and meets the
current small business enterprise size standards found in
Title 13 of the Code of Federal Regulations, Part 121 (13 CFR
Part 121) appropriate to the type of work the enterprise seeks
to perform.
EXISTING LAW :
1)Creates the County Transportation Commissions Act, which
generally provides for the purchase of supplies, equipment,
and materials, and the construction of all facilities and
works, when the expenditure required exceeds $25,000, shall be
by contract let to the lowest responsible bidder.
2)Provides, for specified county transportation commissions,
that whenever the expected expenditure required exceeds
$1,000, but not $25,000, the commission shall obtain a minimum
of three quotations, either written or oral, that permit
prices and terms to be compared.
3)Provides, for specified county transportation commissions,
that where the expenditure required by the bid price is less
than $50,000, the executive director may act for the
commission.
4)Provides, for specified county transportation commissions,
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that all bids for construction work shall be presented under
sealed cover and shall be accompanied by one of the following
forms of bidder's security:
a) Cash;
b) A cashier's check made payable to the commission;
c) A certified check made payable to the commission; or,
d) A bidder's bond executed by an admitted surety insurer,
made payable to the commission.
5)Creates specific provisions in the County Transportation
Commissions Act applicable only to Metro that:
a) Require the purchase of all supplies, equipment, and
materials, and the construction of all facilities and
works, when the expenditure exceeds $25,000, to be by
contract let to the lowest responsible bidder;
b) Require that contracts involving the purchase of
supplies, equipment and materials in excess of $100,000 be
awarded to the lowest responsible bidder or to the bidder
that provides "best value" to Metro; and,
c) Define "best value" to mean the overall combination of
quality, price, and other elements of a proposal that, when
considered together, provide the greatest overall benefit
in response to requirements described in the solicitation
documents.
FISCAL EFFECT : None
COMMENTS :
1)SB 1341 creates a process for Metro to establish a small
business participation goal of 5%
for construction projects, services, and the acquisition of
supplies funded with local, state, or other nonfederal sources
of revenue. The bill provides for the conditions that must be
met for the small business preference to apply.
2)According to the author, Metro recently conducted an outside
audit of its minority and small business programs and the
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findings recommended that Metro increase small business
enterprise participation on non-federally funded contracts.
Additionally, the author notes that in November 2008, Los
Angeles County (County) voters approved Measure R by 67 %,
committing a projected $40 billion to traffic relief and
transportation upgrades throughout the County over the next 30
years. In order to increase small business participation,
legislation is needed to expand Metro's authority.
3)This section of law pertaining to county transportation
commissions and their authority is contained in the Public
Utilities Code, and has been amended several times since its
creation in 1987. Most recently, AB 1471 (Eng), Chapter 536,
Statutes of 2009, amended the same statute last year to allow
Metro to purchase supplies, equipment, and materials from a
public auction sale, to participate in a procurement agreement
involving other public entities, and the bill increased the
minimum bid threshold from $2,500 to $3,000 before triggering
the requirement that specifies that Metro must obtain at least
three quotes prior to making an expenditure.
4)The author took amendments on June 15, 2010, to narrow the
bill according to concerns raised by the Associated General
Contractors and the American Council of Engineering Companies.
The amendments deleted references to "best value
contracting" that were previously contained in the bill and
narrowed the small business goal to specifically exclude
architectural and engineering services.
5)Support Arguments : Many small businesses within Metro's
jurisdiction argue that the bill's improvements to Metro's
current contracting statutes will foster greater small
business inclusion in Metro's procurement process.
Opposition Arguments : Opposition could say that this bill
sets up a situation where a preference is given to small
businesses, at the expense of other willing bidders who might
offer a better financial deal for Metro.
6)This bill is double-referred to the Committee on
Transportation.
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REGISTERED SUPPORT / OPPOSITION :
Support
Los Angeles County Metropolitan Transportation Authority (Metro)
[SPONSOR]
Abratique & Associates, Inc.
Absolute International Security
ADKO Engineering
ATHALYE Consulting Engineering Services, Inc.
AP Engineering & Testing, Inc.
BASE Architecture
California Testing and Inspections, Inc.
California Watershed Engineering
Choctaw Construction Company, Inc.
Community Resources Group
CSE Technologies
DMS Engineering & Associates, Inc.
EARL Security, Inc.
ELITE Engineering Consultant
Fleming Alliance Architecture
Gemstone Masonry, Inc.
Integrated Engineering Management
International Word Processing Services, Inc.
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JMDiaz, Inc.
Katherine Padilla & Associates
Larry Brown Construction Co., Inc.
Lenax Construction Services, Inc.
LIN Consulting, Inc.
Los Angeles County Chapter of American Council of Engineering
Companies
Phoenix Engineering
Reyes & Sons Electric, Inc.
Rothman Engineering, Inc.
SRD Architects Inc.
Safeprobe, Inc
Transtar Builders, Inc.
UltraSystems Environmental
Wincal Technology Corporation
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958