BILL ANALYSIS �
AB 2388
Page 1
Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2388 (Beall) - As Amended: March 29, 2012
SUBJECT : Santa Clara County Open-Space Authority:
authorization to contract.
SUMMARY : Increases the Santa Clara County Open Space
Authority's (Authority's) expenditure thresholds for contracts
for supplies, equipment, or materials, from $10,000 to $25,000,
before those contracts are put out to bid or are subject to
formal bidding procedures, and exempts service contracts from
bidding requirements. Specifically, this bill :
1)Revises the Authority's expenditure thresholds for contracts
for supplies, equipment, or materials, before those contracts
are put out to bid, as follows:
a) Increases the threshold, from $10,000 to $25,000, before
the contract must be put out to bid and let to the lowest
responsible bidder;
b) Increases the threshold, from $50,000 to $75,000, to
allow contracts less than this amount to be let by informal
bidding procedures; and,
c) Increases the threshold, from $50,000 to $75,000, before
contracts exceeding this amount are required to be let by
formal bidding procedures.
2)Exempts service contracts let out by the Authority from
bidding requirements.
3)Makes technical and clarifying changes related to formal bid
notifications.
4)Makes legislative findings and declarations.
EXISTING LAW :
1)Requires the Authority, when a contract for any services,
supplies, equipment or materials, except for legal or
AB 2388
Page 2
appraisal services, or other services as specified, exceeds
$10,000, be put out to bid and let to the lowest responsible
bidder. Allows contracts of $50,000 or less to be let by
informal bidding procedures, and requires contracts of more
than $50,000 to be let by formal bidding procedures.
2)Exempts legal or appraisal services, and contracts for
services authorized to be procured for public work and public
purchases, as specified, from bidding requirements.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "The
Authority is seeking amendments to raise the threshold for
requiring bidding and �the Authority's Board] (Board) approval
of the lowest responsible bidder from $10,000 to $25,000. The
�threshold] was enacted 20 years ago, and at that time, no
cost-of-living adjustment was inserted in the section to account
for inflation. The threshold has made it more difficult for the
Authority to let contracts for modest projects of a minor nature
without Board approval and following bidding procedures. This
hampers the ability of the Authority to efficiently perform
ministerial and maintenance tasks.
"Similar open space agencies in California and the Bay Area
have, for many years, utilized �a higher threshold proposed in
this bill], including the East Bay Regional Park District, the
midpeninsula Regional Open Space District, and the Sonoma County
Agricultural Preservation and Open Space District. The
Authority is not proposing a threshold that is unorthodox or out
of keeping with common practice in the profession. Under this
bill, informal bidding will still need to occur in some
circumstances, and when required, the contract will have to be
let to the lowest responsible bidder.
"Finally, while supplies, equipment, and construction projects
are easily quantifiable and proposals can be objectively
evaluated against one another to ensure that they meet the
specified plans, proposals for training and planning submitted
to the Authority are widely disparate in terms of the services
that they offer. Many of these service contracts are difficult
to compare, and many times, the contractor with the best
proposal and most to offer cannot be chosen because they are
AB 2388
Page 3
slightly higher in price."
Background . The Authority was established by SB 2028 (Mello),
Chapter 822, Statutes of 1992 and created on February 1, 1993.
SB 2028 specified the duties, powers, and function of the
Authority relating to the acquisition, improvement, maintenance
and preservation of open-space lands. SB 2028 authorized the
Authority to contract for property improvement, supplies, and
services. Existing law requires the Authority to bid contracts
valued more than $10,000 and award them to the lowest
responsible bidder. Currently, contracts valued between
$10,000 and $50,000 are allowed to let using informal bidding
procedures and contracts valued over $50,000 are required to be
let using formal competitive bidding procedures.
This bill revises those threshold limits. This bill requires
the Authority to bid contracts valued more than $25,000 and
award them to the lowest responsible bidder. This bill allows
contracts valued between $25,000 and $75,000 to be let using
informal bidding procedures, and requires contracts value over
$75,000 to be let using formal bidding procedures.
Existing law exempts contracts for legal or appraisal services,
and services authorized for public work and public purchases,
from bidding requirements. This bill would exempt all service
contracts from bidding requirements.
Support . According to the sponsor, the Authority, "AB 2388
amends Public Resources Code (PRC) Section 35159. PRC Section
35159 applies only to the Authority, �which] for some time, had
a number of problems and concerns with implementing provisions
of this section. AB 2388 would raise the threshold for required
bidding and Authority's Board approval of the lowest responsible
bidder from $10,000 to$25,000, consistent with other open space
districts in the Bay Area. �This bill] would also raise the
threshold between informal and formal bidding from $50,000 to
$75,000. Lastly, this bill would remove language that services
such as planning and management consulting be subject to the
lowest responsible bidder requirements. �This bill] will ensure
that the Authority is able to administer its routine services,
maintenance, and small projects in a more cost-effective and
efficient manner because it will have the needed flexibility to
choose consultants for services that best meet the needs of the
Authority and the public."
AB 2388
Page 4
REGISTERED SUPPORT / OPPOSITION :
Support
Santa Clara County Open Space Authority (sponsor)
Napa County Regional Park and Open Space District
Sonoma County Agricultural Preservation and Open Space District
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301