BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 720 HEARING: 7/6/11
AUTHOR: Hall FISCAL: No
VERSION: 6/27/11 TAX LEVY: No
CONSULTANT: Weinberger
COUNTIES' PUBLIC WORKS CONTRACTS
Revises the Uniform Construction Cost Accounting Act's road
commissioner exemption.
Background
The Public Contract Code spells out the procedures that
local officials follow when they build public works
projects, including limits on the contracts' values.
When counties, cities, special districts, redevelopment
agencies, school districts, and community college districts
voluntarily adopt the standards and procedures of the
Uniform Public Construction Cost Accounting Act (UPCCAA),
they can use higher limits for their contracts (AB 1666,
Cortese, 1983). About 770 local agencies participate.
Proposed Law
I. Road commissioner authority . Counties that adopt the
UPCCAA's standards and procedures can still use an
alternative procurement procedure that authorizes a county
road commissioner, or a registered civil engineer under the
direction of the county transportation director, to have
any work upon county highways done under his or her
supervision and direction. These county road commissioner
alternative procurement procedures authorize a county to:
Award a contract covering both work and material,
with the contract let to the lowest responsible
bidder.
Purchase the material and let a contract for the
performance of the work, with the material bought at
the lowest possible cost and the contract let to the
lowest responsible bidder.
Purchase the material and have the work done by day
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labor, in which case advertising for bids is not
required.
Authorize the county road commissioner or a
registered civil engineer under the direction of the
county transportation director to execute changes up
to $5,000 for any contract of $50,000 or less, or 10%
for contracts over $50,000, but not to exceed
$250,000. For contracts whose original cost exceeds
$250,000, the extra cost for any change or addition to
the work so ordered cannot exceed $25,000, plus 5% of
the amount of the original contract costs in excess of
$250,000.
Purchase the material and let a contract for the
work or let a contract covering both work and material
without advertising for bids when the estimated cost
of emergency work exceeds $25,000 and the public
interest and necessity demand immediate action to
safeguard life, health, or property.
Starting January 1, 2013, Assembly Bill 720 lets a board of
supervisors or a county road commissioner for a county with
a population of 50,000 or more use, as an alternative to
procedures in the Uniform Construction Cost Accounting Act,
specified statutory county road commissioner alternative
procurement procedures for both:
Maintenance and emergency work, and
New road construction and road reconstruction as
long as the total annual value of the new road
construction and the road reconstruction performed by
day labor, as specified in state law, does not exceed
30% of the total value of all work performed by force
account other than maintenance as reported in the
State Controller's Streets and Roads Annual Report as
of January 1 of each year.
AB 720 states that on or after January 1, 2013, the Uniform
Public Construction Cost Accounting Act does not prohibit a
board of supervisors or a county road commissioner for a
county with a population of less than 50,000 from using, as
an alternative to procedures in the Uniform Construction
Cost Accounting Act, specified statutory county road
commissioner alternative procurement procedures.
AB 720 requires a county board of supervisors or county
road commissioner to declare, in advance, its intention to
use county road commissioner alternative procurement
AB 720 -- 6/27/11 -- Page 3
procedures for new road construction and road
reconstruction.
AB 720 states that specified Uniform Public Construction
Cost Accounting Act requirements governing a public
agency's rejection of bids apply to any county that is
subject to the bill's provisions.
II. Informal bid limits . The 14-member California Uniform
Construction Cost Accounting Commission reviews the
UPCCAA's statutory limits on contract values every five
years. If the Commission recommends higher amounts, the
State Controller promulgates the changes and the
Legislature periodically amends the Act to reflect the new
limits. Currently, local agencies can use their own
employees for projects worth $30,000 or less. This amount
is called the "force account limit." Projects worth
$125,000 or less rely on informal bids. Projects that cost
more than $125,000 require formal bids, except that a local
agency's governing body can award a contract worth $137,500
or less to the lowest responsible bidder if:
All of the informal bids received exceed $125,000,
The governing body determines that the public
agency's cost estimate was reasonable, and
It adopts a resolution by a 4/5 vote.
(SB 1196, Senate Local Government Committee, 2006).
At its March 30, 2011 meeting, the CUCCAC voted to increase
the informal bid limit from $125,000 to $175,000. In a
letter sent to all local agencies that participate in the
Uniform Public Construction Cost Accounting Act, the State
Controller announced that the new limit would take effect
on July 1, 2011.
Assembly Bill 720 increases, from $125,000 to $175,000, the
maximum value of public projects that may be let to
contract by informal procedures under the Uniform Public
Construction Cost Accounting Act. AB 720 increases, from
$30,000 to $45,000 the maximum value of projects that may
be performed by a public agency's employees.
State Revenue Impact
No estimate.
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Comments
1. Purpose of the bill . The recent amendments to AB 720
enact a compromise among counties, construction firms, and
labor unions over counties' use of the UPCCAA's road
commissioner exemption. The bill preserves small counties'
flexibility to use the road commissioner alternative
procurement procedures when necessary, while giving private
construction firms more opportunities to bid on large road
construction projects.
2. Just one more thing . AB 720 codifies the new informal
bid limit that the California Uniform Public Construction
Cost Accounting Commission recently adopted and increases
the UPCCAA's force account limit. However, the bill does
not increase the informal bid limit exception that applies
when all informal bids on a project exceed the informal bid
limit specified by the Commission. AB 943, which the
Committee passed at its June 22 hearing, increases the
informal bid limit exception amount from $137,500 to
$187,500. The Committee may wish to consider amending
identical language into AB 720, thereby ensuring that the
statute will be changed if the Governor signs either bill,
or both bills.
3. Double-referral . Because AB 720 revises the statutory
exception under which counties can use their employees for
road construction projects, Senate Rules Committee
double-referred the bill first to the Senate Transportation
and Housing Committee, which voted 7-0 to pass the bill,
and then referred it to the Senate Governance and Finance
Committee.
Assembly Actions
Assembly Local Government Committee: 7-0
Assembly Floor: 49-18
Support and Opposition (6/30/11)
Support : California Chapter of the American Fence
Association; California Chapters of the National Electrical
Contractors Association; California Landscape and
AB 720 -- 6/27/11 -- Page 5
Irrigation Council; California Fence Contractors
Association; California State Council of Laborers;
Construction & General Laborers, Local #185; Construction
Industry Force Account Council; Desert Water Agency;
Engineering Contractors Association; Engineering & Utility
Contractors Association; Flasher Barricades Association;
Golden State Builder's Exchanges; Marin Builders
Association; McGuire and Hester, Inc.
Opposition : Public Employees Union, Local One.