BILL ANALYSIS �
AB 2440
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2440 (Bonnie Lowenthal)
As Amended June 18, 2012
Majority vote
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|ASSEMBLY: |54-20|(May 31, 2012) |SENATE: |37-0 |(August 20, |
| | | | | |2012) |
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Original Committee Reference: L. GOV.
SUMMARY : Expands the contracting authority of the Los Angeles
County Metropolitan Transportation Authority (MTA) to permit the
use of objective selection criteria in addition to price for
design-build projects, shortens notice requirements for
design-build projects costing less than $10 million dollars, and
raises or eliminates certain contracting thresholds for other
alternative procurement processes.
The Senate amendments :
1)Delete the minimum threshold of $100,000 above which MTA may
facilitate certain contract awards to small businesses through
preferences and participation goals, as specified, except for
contracts for involving private architectural, landscape
architectural, engineering, environmental, land surveying or
construction management professional services.
2)Authorize MTA to generally establish and maintain a
prequalification program for bidders, as specified.
3)Make various technical or other non-substantive amendments.
4)Make findings and declarations relative to the importance of
improving MTA's change order processes.
5)Provide that, if the Commission on State Mandates determines
that the bill contains costs mandated by the state,
reimbursement for those costs shall be made, as specified.
AS PASSED BY THE ASSEMBLY , this bill:
1)Repealed provisions unique to MTA that require its inspector
general to prepare a prequalification questionnaire with
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specified contents for any business seeking to provide goods
or services under contract with MTA.
2)Raised the threshold from $100,000 to $150,000 for purchases
of supplies, equipment and materials that may be selected
under a "best value" methodology.
3)Raised the threshold from $100,000 to $150,000 under which MTA
can use an informal procurement process based on a minimum of
three quotations.
4)Authorized MTA to award design-build contracts based on a
competitive bidding process that employs objective selection
criteria, including but not limited to proposed design
approach, features, functions, and life-cycle costs, in
addition to price.
5)Required, for design-build contracts estimated to cost over
$10 million, MTA to advertise a request for bids or proposal
at least 60 days in advance, while for design-build contracts
estimated to cost under $10 million MTA must advertise a
request for bids or proposal at least 30 days in advance.
6)Required the contractor on a design-build contract to
competitively bid those portions of the design work that can
be subcontracted.
7)Required the contractor to provide to MTA a list of
subcontractors whose work is over one-half of one percent of
the total project cost, as soon as subcontractors are
identified.
8)Provided that, once subcontractors are listed, they should
have the same rights as provided for in the Subletting and
Subcontracting Fair Practices Act.
9)Repealed the requirement that MTA adopt a change order
procedure for its contracts.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill will impose
negligible state costs.
COMMENTS : This bill makes multiple separate changes to MTA's
contracting authority, including minor expansions of MTA's use
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of design-build and "best value" contracting methodologies. The
measure is sponsored by MTA.
This bill deletes the requirement that MTA's inspector general
develop a pre-qualification questionnaire for prospective
contractors, and instead creates a general, more flexible
authority to establish and maintain a pre-qualification program.
According to the author, "�r]emoving the �MTA] specific law
would reduce the burden on prospective bidders of having to
comply with �MTA]-unique requirements and would eliminate a
potential conflict raised by the requirement in �Public
Utilities Code Section] 130051.21 (a) that the �MTA] Inspector
General draft the pre-qualification questionnaire, which leaves
the office of the �Inspector General] in the position of
inspecting its own work product."
The bill also changes three-cost thresholds for procurement
alternatives to the lowest responsible bidder methodology: a)
for the purchase of supplies, equipment and materials that may
be selected under a "best value" methodology, the limit goes
from $100,000 to $150,000; b) for contracts where MTA may use an
informal procurement process based on a minimum of three
quotations, the upper threshold goes from $100,000 to $150,000;
and, c) for certain contract awards to small businesses that MTA
may facilitate through preferences and participation goals, the
minimum $100,000 threshold is eliminated. According to the
author, "�t]hese changes will allow �MTA] to take advantage of
the streamlining opportunities offered by its federal funding
partners by conforming state law to recent changes made in
federal contracting thresholds."
Furthermore, this bill makes a number of changes to MTA's
design-build authority statute. First, it authorizes MTA to
utilize objective selection criteria other than price in
awarding contracts, such as proposed design approach, features,
functions, life-cycle costs, and other criteria deemed
appropriate by MTA. The bill also specifies that for contracts
estimated to cost less than $10 million, MTA need only publish a
notice requesting bids or proposals at least 30 days before
receipt (contracts in excess of $10 million must still advertise
for 60 days). Lastly, this bill requires the contractor to
competitively bid those portions of the design work that can be
subcontracted, and to provide MTA with a list of identified
subcontractors whose work is over one-half of one percent of the
total project cost. Listed subcontractors will have the same
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rights already provided in the Subletting and Subcontracting
Fair Practices Act.
Regarding the shorter 30 day bid/proposal notice for projects
under $10 million, the author states that "�t]he notice period
in this section refers only to the timeframe under which a
solicitation is advertised. This does not impact the timeframe
that proposers have to both review the solicitation documents
and respond to the proposal. �MTA] uses a variety of methods to
publish proposals including posting on our webpage and a 60 day
look-ahead at upcoming projects. These methods are more
effective in providing notice of solicitations, are more
effective in targeting potential bidders. Additionally, bidders
use these methods to identify potential opportunities rather
than broad non-targeted newspaper advertising."
Finally, the bill deletes the requirement that MTA adopt a
change order procedure for contracts. According to the author,
"�t]his provision was written at a time when �MTA's] contract
administration function was under the control of its
construction department. Since then, however, �MTA] is required
by law to have an 'independent professional procurement staff.'
Consequently, this provision is no longer necessary to ensure
that change orders are reviewed appropriately."
Analysis Prepared by : Hank Dempsey / L. GOV. / (916) 319-3958
FN: 0004562