BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 720|
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THIRD READING
Bill No: AB 720
Author: Hall (D)
Amended: 7/12/11 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-0, 6/21/11
AYES: DeSaulnier, Gaines, Huff, Kehoe, Lowenthal, Rubio,
Simitian
NO VOTE RECORDED: Harman, Pavley
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 7/6/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
ASSEMBLY FLOOR : 49-18, 5/31/11 - See last page for vote
SUBJECT : Uniform construction cost accounting:
alternative procedures
SOURCE : Author
DIGEST : This bill limits, beginning January 1, 2013, the
ability of a county under the California Uniform
Construction Cost Accounting Act (Act) from utilizing an
alternative contracting procedure for new road construction
and road reconstruction projects, while preserving a
counties ability to perform maintenance and emergency work
by force account. In addition, states that, on or after
January 1, 2013, the Act does not prohibit a county with a
population of less than 50,000 from using an alternative
CONTINUED
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contracting procedure.
ANALYSIS : Since 1935, state law has specified the
conditions governing how a county road commissioner, or a
registered civil engineer under the direction of the county
director of transportation, may use force account (i.e.,
county employees), day labor, or contracts with private
firms to perform work on county streets and roads.
In 1983, the Legislature enacted the Act to alleviate
disputes between public agencies and the construction
industry over what projects should be put out to bid and
what projects should be completed with county employees.
The Act achieves this objective in two principle ways.
First, it establishes a process for developing uniform cost
accounting procedures for public construction projects and
for recommending the procedures to the State Controller for
adoption. Second, it establishes the dollar limits, which
the State Controller may adjust over time, for what work
must be done in-house and what work must be contracted out.
The use of the Act is a discretionary decision of county
boards of supervisors, cities, and special districts. The
Act only applies to public agencies whose governing boards
have elected by resolution to become subject to the act's
uniform construction cost accounting procedures.
(Signatories to the Act)
Counties that elect to be subject to the Act's uniform
construction accounting procedures, they may continue to
use the "road commissioner" procurement procedures
established in 1935 for highway construction only. This is
known as the "road commissioner exemption."
The Uniform Public Construction Cost Accounting Act of
1983:
1.Defines "public agency" as a city, county, city and
county, including chartered cities and chartered
counties, any special district, and any other agency of
the state for the local performance of governmental or
proprietary functions within limited boundaries.
Included within the definition is a nonprofit transit
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corporation that is wholly owned by a public agency and
formed to carry out the purposes of the public agency.
2.Defines a "public project" as:
A. The construction, reconstruction, erection,
alteration, renovation, improvement, demolition, and
repair work involving any publicly-owned, leased, or
operated facility.
B. Painting or repainting of any publicly-owned,
leased, or operated facility.
C. In the case of a publicly owned utility system,
"public project" includes only the construction,
erection, improvement, or repair of dams,
reservoirs, power plants, and electrical
transmission lines of 230,000 volts and higher.
3.Excludes maintenance work from the definition of a
"public project" and defines "maintenance work" as:
A. Routine, recurring, and usual work for the
preservation or protection of any publicly-owned or
publicly-operated facility for its intended
purposes.
B. Minor repainting.
C. Resurfacing of streets and highways at less than
one inch.
D. Landscape maintenance, including mowing,
watering, trimming, pruning, planting, replacement
of plants, and servicing of irrigation and sprinkler
systems.
E. Work performed to keep, operate, and maintain
publicly owned water, power, or waste disposal
systems, including, but not limited to, dams,
reservoirs, power plants, and electrical
transmission lines of 230,000 volts and higher.
4.Authorizes the governing boards of public agencies to
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adopt a resolution agreeing to be subject to uniform cost
accounting procedures established by the act.
5.Establishes the following contracting procedures for
public agencies that have adopted a resolution:
A. Public projects of $25,000 or less may be
performed by agency employees, by force account, by
negotiated contract, or by purchase order.
B. Public projects of $100,000 or less may be let to
contract by informal procedures specified in the
Act.
C. Public projects of greater than $100,000 are let
to contract by a formal bidding procedure specified
in the Act and must be awarded to the lowest
responsible bidder.
D. The above limits may be, and have been, adjusted
by the Controller to account for inflation. The
current limit for use of agency workforce is
$30,000, the informal bidding limit is up to
$120,000, and the formal bidding procedure must be
followed for construction procurement over $120,000.
6.Establishes procedures for performing work during
emergencies and allows the work to be performed by day
labor, under the direction of the agency, by a
contractor, or by both.
The Road Commissioner Authority . The 1935 Road
Commissioner Authority authorizes a county road
commissioner or a county engineer to use an alternative
procurement procedure for street and road purposes that the
Legislature adopted in 1935. This procedure includes the
following contract options:
1.Awarding a contract covering both work and material, with
the contract let to the lowest responsible bidder.
2.Purchasing the material and letting a contract for the
performance of the work with the material bought at the
lowest possible cost and the contract let to the lowest
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responsible bidder.
3.Purchasing the material and having the work done by day
labor, in which case advertising for bids is not
required.
4.Authorizing the county road commissioner or a registered
civil engineer under the direction of the county director
of transportation to execute changes up to $5,000 for any
contract of $50,000 or less, or ten percent 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 five percent of the amount of the
original contract costs in excess of $250,000.
5.Purchasing the material and letting a contract for the
work or by letting a contract covering both work and
material without advertising for bids when the estimated
cost of emergency work necessitated by the imminence or
occurrence of a landslide, flood, storm damage, or other
emergency exceeds $25,000 and the public interest and
necessity demand immediate action to safeguard life,
health, or property.
This bill:
1. Allows, beginning January 1, 2013, 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 Act, specified
statutory county road commissioner alternative
procurement procedures for both:
A. Maintenance and emergency work.
B. 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 percent 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.
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2. States that on or after January 1, 2013, the 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 Act, specified statutory county road commissioner
alternative procurement procedures.
3. Requires a county board of supervisors or county road
commissioner to declare, in advance, its intention to
use county road commissioner alternative procurement
procedures for new road construction and road
reconstruction.
4. States that specified Act requirements governing a
public agency's rejection of bids apply to any county
that is subject to the bill's provisions.
5. Increases, from $125,000 to $175,000, the maximum value
of public projects that may be let to contract by
informal procedures under the Act, increases, from
$30,000 to $45,000 the maximum value of projects that
may be performed by a public agency's employees, and
increases from $137,500 to $187,500 the bid limit
exception that applies when all informal bids on a
project exceed the informal bid limit specified by the
Uniform Public Construction Cost Accounting Commission.
Background
The Act was established to ensure a fair, open, and
transparent bidding and accounting procedures for all local
public agencies-cities, counties, school districts, special
districts- that are signatories to the Act and adhere to
its rules, in exchange for more flexible bidding and
advertising procedures. Thirty-four of the state's
fifty-eight counties are signatories, including small
counties such as Trinity and Alpine and large counties like
Riverside and Contra Costa. From the prospective of
contractors, the Act creates uniformity in the construction
procurement market.
The Road Commissioner Authority, established in 1935, was
an early effort at legislating uniform contracting
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procedure for county public works programs. A notable
feature of the road commissioner authority is it does not
include a dollar cap above which the counties must seek
competitive bids. A unique feature of the Act, which only
counties enjoy, is that counties that are signatories to it
may also select to procure construction services under the
terms of the Road Commissioner Authority. Many smaller
counties use the Road Commissioner Authority because their
projects are modest in value and the local construction
industry may have limited capacity. A few larger counties
who are signatories to the act continue to use the Road
Commissioner Authority notably Riverside County, which is
in a metropolitan region.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/12/11)
California Chapter of the American Fence Association
California Chapters of the National Electrical Contractors
Association
California Fence Contractors Association
California Landscape and Irrigation Council
California State Council of Laborers
Construction & General Laborers, Local #185
Construction Industry Force Account Council
Desert Water Agency
Engineering & Utility Contractors Association
Engineering Contractors Association
Flasher Barricades Association
Golden State Builder's Exchanges
Marin Builders Association
McGuire and Hester, Inc.
OPPOSITION : (Verified 7/12/11)
Public Employees Union, Local One
ARGUMENTS IN SUPPORT : According to the proponents, this
bill brings into alignment conflicting provisions between
the act and the Road Commissioner Authority by placing a
threshold on the amount of new road construction projects
counties may perform themselves before they have to put the
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work out to bid.
The Construction Industry Force Account Council argues that
by permitting counties to become signatories to the act and
at the same time to continue to use the pre-existing
authority of the road commissioner provision, the purpose
of the Act "to ensure a fair, open and transparent bidding
and accounting procedures for public agencies" is
undermined.
ASSEMBLY FLOOR :
AYES: Alejo, Allen, Ammiano, Atkins, Block, Bonilla,
Bradford, Buchanan, Charles Calderon, Campos, Carter,
Cedillo, Conway, Cook, Davis, Eng, Fletcher, Fong,
Fuentes, Furutani, Galgiani, Garrick, Gatto, Gordon,
Hall, Harkey, Hayashi, Huber, Hueso, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Miller, Mitchell, Monning,
Nestande, Norby, Perea, Portantino, Skinner, Smyth,
Solorio, Swanson, Valadao, Wieckowski, Williams, John A.
P�rez
NOES: Achadjian, Beall, Bill Berryhill, Chesbro, Donnelly,
Feuer, Grove, Hagman, Halderman, Hill, Huffman, Jones,
Mansoor, Morrell, Nielsen, Olsen, Silva, Wagner
NO VOTE RECORDED: Blumenfield, Brownley, Butler, Dickinson,
Beth Gaines, Gorell, Roger Hern�ndez, Jeffries, Mendoza,
Pan, V. Manuel P�rez, Torres, Yamada
JJA:do 7/13/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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