BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1341|
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UNFINISHED BUSINESS
Bill No: SB 1341
Author: Price (D)
Amended: 8/12/10
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-1, 5/4/10
AYES: Lowenthal, Huff, DeSaulnier, Harman, Kehoe, Pavley,
Simitian
NOES: Ashburn
NO VOTE RECORDED: Oropeza
SENATE FLOOR : 28-0, 5/28/10
AYES: Alquist, Ashburn, Cedillo, Corbett, Correa,
DeSaulnier, Ducheny, Dutton, Florez, Hollingsworth, Huff,
Kehoe, Leno, Liu, Lowenthal, Negrete McLeod, Padilla,
Pavley, Price, Romero, Runner, Simitian, Steinberg,
Strickland, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Aanestad, Calderon, Cogdill, Cox,
Denham, Hancock, Harman, Oropeza, Walters, Wiggins,
Vacancy, Vacancy
ASSEMBLY FLOOR : 72-3, 8/16/10 - See last page for vote
SUBJECT : Los Angeles County Metropolitan Transportation
Authority:
contracting practices
SOURCE : Author
DIGEST : This bill enacts provisions applicable to the
CONTINUED
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Los Angeles County Metropolitan Transportation Authority
relative to preferences in contracting for small business
enterprises, as defined.
Assembly Amendments exempt contracts for professional
services involving private architectural, landscape
architectural, engineering, environmental, land surveying,
or construction management from the provisions of the bill,
and allow Los Angeles County Metropolitan Transportation
Authority to establish limitations regarding the average
annual gross receipts of a small business and establish
limitations regarding the personal net worth of the owner
of the small business, as specified.
ANALYSIS : In 1996, California voters approved
Proposition 209, which amended the California Constitution
to preclude granting preferences on the basis of race, sex,
color, ethnicity, or national origin in the operation of
public employment, public education, or public contracting.
The provision does not apply to federal contracting
requirements. In response to Proposition 209, the Los
Angeles County Metropolitan Transportation Authority
(METRO) adopted a local ordinance that provides a
preference to small businesses and is not inconsistent with
the provisions of Proposition 209. This bill endeavors to
codify the small business preference requirements.
Existing law governing METRO procurement:
1. Requires that construction contracts in excess of
$25,000 be awarded to the lowest responsible bidder.
2. Requires 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. To award
contracts on the basis of best value METRO must include
in the solicitation for a bid the evaluation criteria
that will be used to determine best value.
3. Defines value as 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
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solicitation documents."
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 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 five
percent to the lowest responsible bidders who meet
the goal.
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 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
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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/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 any are available.
H. The bidder negotiated in good faith with the small
business enterprises, and did not unjustifiably
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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.
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.
4. Allows METRO to establish limitations regarding the
average annual gross receipts of a small business over
the previous three fiscal years and establish
limitations regarding the personal net worth of the
owner of the small business, exclusive of the value of
the owner's personal residence.
Comments
Purpose of the bill . The purpose of this bill is to create
a process to establish a small business participation goal
of five percent for construction projects, services, and
the acquisition of supplies funded with local, state, or
other nonfederal sources of revenue. Under the terms of
the California Constitution business participation goals
associated with public contracting cannot be race or gender
based. This bill meets that test.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/4/10) (Unable to reverify)
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Los Angeles County Chapter of the American Council of
Engineering Companies of California
ACE Fence Company
AGS Architects
Aviva Spectrum
CK Management
Integrated Engineering Management
Langford and Carmichael
Lenax Construction Services
PJS&P Associates
R-T Welding and Fabrication
Selbert Perkins Design
Ultra Systems
Wincal Technology
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Bill Berryhill, Tom
Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Caballero, Carter, Chesbro, Conway, Cook, Coto,
De La Torre, De Leon, DeVore, Eng, Evans, Feuer,
Fletcher, Fong, Fuentes, Fuller, Furutani, Galgiani,
Garrick, Gatto, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller,
Monning, Nava, Nestande, Niello, Nielsen, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NOES: Anderson, Gaines, Norby
NO VOTE RECORDED: Bass, Blakeslee, Charles Calderon,
Davis, Vacancy
JJA:mw 8/17/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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