BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2388 HEARING: 6/13/12
AUTHOR: Beall FISCAL: Yes
VERSION: 6/6/12 TAX LEVY: No
CONSULTANT: Lui
SANTA CLARA OPEN-SPACE AUTHORITY'S CONTRACTS
Makes changes to Santa Clara Open-Space Authority's bidding
procedures.
Background and Existing Law
The Legislature created the Santa Clara Open-Space
Authority (SB 2028, Mello, 1992) to acquire, improve,
maintain, and preserve open-space lands in the region. The
Authority may contract for services, supplies, equipment,
or materials (except for legal or appraisal services or
contracts with private architects, engineering, land
surveying, and construction project management firms),
according to the following contract thresholds:
If contracts are valued more than $10,000, the
Authority must award them to the lowest responsible
bidder.
If contracts are valued between $10,000 and
$50,000, the Authority may use informal bidding
procedures.
If contracts are valued over $50,000, the Authority
must use formal bidding procedures.
For the last 20 years, the Authority has not increased bid
limits for service contracts to adjust for inflation. The
author would like to increase the Authority's bidding
thresholds for service contracts.
Proposed Law
Assembly Bill 2388 changes the Santa Clara Open-Space
Authority's contract requirements for supplies, equipment,
or materials, as follows:
Increases, from $10,000 to $25,000, the threshold
at which the Authority must award contracts to the
AB 2388 -- 6/6/12 -- Page 2
lowest responsible bidder.
Increases, from $50,000 to $75,000, the threshold
at which the Authority must award contracts through
formal bidding procedures.
If the Authority's governing board awards a contract to the
most responsible and qualified bidder, as defined, AB 2388
specifies that these bidding thresholds do not apply to
contract for services, including:
Services, including planning, consulting, or legal
or appraisal services, or
Services authorized to be procured for private
architects, engineers, land surveying, or construction
project management.
The bill defines "most responsible and qualified bidder" as
the bidder deemed by the governing board that best fits the
needs of the service contract or meets specified criteria.
To determine the most responsible and qualified bidder, the
bill provides criteria the governing board may use,
including:
Experience of the bidder as a firm, including past
performance of the firm on contracts of similar size
and scope,
Experience and qualifications of personnel on the
bidder's team,
Demonstrated understanding of the scope of the
service, including schedule and plan to accomplish,
and
Best overall financial return to the governing
board.
The bill makes technical and clarifying changes related to
formal bid notifications and the governing board. The bill
makes findings and declarations to support the necessity of
a special statute because of the Authority's unique
circumstances.
State Revenue Impact
No estimate.
Comments
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1. Purpose of the bill . Along with a nineteen-year-old
contract bid limit that hasn't been adjusted for inflation,
the Authority's lowest responsible contract bid requirement
prevents them from choosing a more qualified service
contract bidder. By awarding the contract to the lowest
responsible bidder, which may not be as responsive to the
Authority's needs, the Authority argues that it spends more
money overall, using lower cost service providers more
frequently. For example, in April 2010, due to the lowest
contract bid requirement, the Authority awarded a
three-year contract for auditing services to the lowest
bidder, against staff and counsel's recommendation for
another higher-cost auditor. Subsequently, the lowest-bid
contractor billed the Authority $3,000 more than the agreed
figure. The Authority had to terminate that contract and
now is looking for a new auditor. AB 2388 requires that
the Authority's governing board determine the bidder is the
most responsible and qualified bidder and before exempting
the service contract from the contract bid thresholds.
This ensures a nexus between service contract exemptions
and bidder qualifications. AB 2388 provides the necessary
upkeep to Santa Clara Open-Space's aging enabling act.
2. "Others ." This bill brings the Authority's competitive
bidding $25,000 limit to what other open-space and regional
park districts are authorized, like Midpeninsula Regional
Open Space District or East Bay Park District. However,
those districts don't employ separate informal and formal
bid limits. Also, Midpeninsula and East Bay's $25,000
limits were last adjusted in 1983. The Committee may wish
to consider whether this bill lays the groundwork for other
open-space and regional park districts to ask for bid limit
increases.
3. Inflation . The Authority wants to adjust bid limits to
account for twenty-years of inflation, but the figures may
not add up. $10,000 in 1992 is equivalent to $16,399
today; $50,000 is around $81,977. The Committee may wish
to consider amending the lowest bid limit at $20,000,
instead of $25,000; and, the $50,000 formal bid limit to
$80,000, instead of $75,000.
Assembly Actions
Assembly Local Government: 8-0
Assembly Business, Professions, and Consumer Protection:9-0
AB 2388 -- 6/6/12 -- Page 4
Assembly Appropriations: 17-0
Assembly Floor: 73-0
Support and Opposition (6/7/12)
Support : East Bay Regional Park District; Marin County
Parks, Midpeninsula Regional Open Space District; Napa
County Regional Park and Open Space District; Peninsula
Open Space Trust; Santa Clara County; Santa Clara County
Open Space Authority; Sonoma County Agricultural
Preservation and Open Space District.
Opposition : Unknown.