BILL ANALYSIS �
AB 2580
Page 1
Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2580 (Furutani) - As Amended: April 16, 2012
Policy Committee: Business and
Professions Vote: 6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends the sunset date on the Los Angeles Unified
School District's (LAUSD) job order contracting (JOC) pilot
project from December 1, 2012, to December 31, 2020.
The bill also requires the district to report to the Legislature
by June 30, 2017 regarding a description, as specified, of each
job order contract completed by December 31, 2016, and by
December 31, 2019 on all job order contract projects completed
by June 30, 2019.
FISCAL EFFECT
Negligible fiscal impact.
COMMENTS
1)Background . JOC allows for the awarding of a competitively bid
contract based upon published construction tasks and unit
prices. Rather than bid a total price for the project, a
contractor will bid an adjustment factor, which reflects
specified costs, to the published unit prices. The unit
price, multiplied by the adjustment factor, equals the final
price for any future task. Awards must be made to the lowest
responsible pre-qualified bidder. The contractor is generally
informed of a range for the total contract value, with the
owner obligated to award only the minimum amount during the
term of the contract. Once a contract is awarded, the
contractor is given projects in a work order format. The
owner is able to evaluate the performance of the contractor
based upon the work orders, and, if unsatisfactory, retains
AB 2580
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the ability to terminate the JOC once the minimum dollar value
of the range for the contract value is met.
JOC is generally believed to be well suited to repetitive jobs
and situations in which owners know that many small tasks will
arise, but the timing, type of work, and quantity of work are
unknown at the time the contract is signed. These jobs
typically have minimal design requirements, and design work is
typically accomplished quickly by the job order contractor's
in-house design staff.
AB 14 (Horton)/Chapter 889 of 2003, authorized LAUSD's JOC
pilot program. AB 2362 (Horton)/Chapter 570 of 2006 extended
the December 1, 2007 sunset date on the program to December 1,
2012 , and required the LAUSD, by November 30, 2011, to submit
a final report detailing each job order contract procured and
the work performed under each contract. The LAUSD stated that
for "job orders completed through November 1, 2011, actual
project costs were reduced by an average of 9.26% as compared
to the estimates and the procurement time. The procurement
time savings varied among projects, but overall, produced
significant time savings and provided the LAUSD with a
valuable procurement tool."
2)Purpose . This bill extends LAUSD's program through 2019.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081