BILL ANALYSIS �
AB 1947
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Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1947 (Grove) - As Introduced: February 23, 2012
SUBJECT : Legislative contracts.
SUMMARY : Requires all contracts executed by the Legislature to
be approved by the Department of General Services (DGS), and
establishes a "low-bid" contracting process for public works
contracts let by the Legislature. Specifically, this bill :
1)Requires all contracts executed by the Legislature to be
approved by DGS, except in cases of emergency.
2)Establishes a "low-bid" contracting process for public works
contracts executed by the Legislature that requires the time
and place for accepting bids to be advertised, and establishes
a process for the prequalification of bidders, the acceptance
of bids, and award of contracts to the lowest responsible
bidder.
EXISTING LAW establishes the Legislative, Executive, and
Judicial Branches of state government as co-equal.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "AB
1947 adds a new section to the Public Contract Code that
establishes competitive bidding for the California State
Legislature. It would allow the public to know what contracting
decisions are made by the Legislature and how they are made, so
that the Legislature is accountable to the people for its
decisions concerning budgeting and expenditure of the people's
money. In addition, AB 1947 would submit the Legislature to the
same competitive bidding laws that apply to other legislative
bodies in the state, thus stimulating competition in a manner
conducive to sound fiscal practices and eliminating favoritism,
fraud, and corruption."
Unclear and questionable provisions . This bill would
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subordinate the internal, administrative operations of the
Legislative Branch of state government to the discretion and
approval of the Executive Branch by requiring all Legislative
contracts to be approved by DGS.
"Low-bid" contracting is the historical method of awarding
public works contracts, such as the construction of public
infrastructure in the form of buildings, transportation systems,
water and sewer systems, etc. However, in recent years low-bid
contracting has been increasingly replaced by "best value"
contracting that allows public agencies to consider the "value"
offered by a contractor in addition to price. In the realm of
public works projects, the current trend has been to allow
public agencies to use "design-build" contracting, which allows
public agencies to execute a single contract for construction
projects that would otherwise have been executed through
numerous contracts on a low-bid basis. With respect to Capitol
restoration projects that this bill is premised upon, the use of
low-bid contracting may not produce the type of work that one
needs for the construction, renovation, and repair of the
historic and socially significant structure that is embodied by
the State Capitol.
It is also noted that this bill would subject all contracts
executed by the Legislature to the scrutiny and discretionary
approval of the Executive branch of government, yet this bill
only provides a contract process for public works projects.
Existing state law provides for numerous unique contracting
processes for Executive Branch agencies based on the unique
needs of the agencies or in recognition of the unique
circumstances of specific market dynamics for different
products, such as information technology. Accordingly, it
appears that the low-bid contracting process proposed by this
bill is incomplete.
In summary, the Committee may wish to consider the ramifications
of subordinating the internal, administrative operations of the
Legislative Branch of government to the discretionary approval
of the Executive Branch, and this bill's lack of processes for
other types contracts executed by the Legislature.
Support . According to the Labor Issues Solutions, LLC and the
Dayton Public Policy Institute, "The people of California expect
that their state government agencies - whether in the
Legislative Branch, the Executive Branch, or the Judicial Branch
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- will spend their tax money wisely by using open and
competitive bidding for goods and services, in order to get the
best quality work from capable and responsible companies at the
best price.
"But with the special exemption of the State Legislature from
competitive bidding under the State Contract Act, certain
legislators and legislative employees have been able to practice
favoritism in awarding contracts, without scrutiny? The
Legislature could get away with instituting a union-only bid
specification in secret, because it is exempt from the state's
competitive bidding laws, as confirmed in a 2006 decision of a
Sacramento County Superior Court judge and a 2008 decision of
the California Third Appellate Court in The Zumbrun Law Firm v.
California Legislature. (The California Supreme Court
�declined] to hear an appeal of that appeals court decision.)"
Previous Legislation . AB 641 (Hagman) of 2009, is an identical
bill that would have required all contracts executed by the
Legislature to be approved by DGS, and would have established a
"low-bid" contracting process for public works contracts let by
the Legislature. This bill was held in the Assembly Business,
Professions and Consumer Protection Committee.
AB 1070 (Cook) of 2007, is an identical bill that would have
required all contracts executed by the Legislature to be
approved by DGS, and would have established a "low-bid"
contracting process for public works contracts let by the
Legislature. This bill was held in the Assembly Business,
Professions and Consumer Protection Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Dayton Public Policy Institute
Labor Issues Solutions, LLC
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301
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