BILL ANALYSIS                                                                                                                                                                                                    �





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          |                                                                 |
          |         SENATE COMMITTEE ON NATURAL RESOURCES AND WATER         |
          |                   Senator Fran Pavley, Chair                    |
          |                    2011-2012 Regular Session                    |
          |                                                                 |
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          BILL NO: SB 224                    HEARING DATE: April 26, 2011  

          AUTHOR: Pavley                     URGENCY: No  
          VERSION:  April 14, 2011           CONSULTANT: Dennis O'Connor  
          DUAL REFERRAL: No                  FISCAL: Yes  
          SUBJECT: Public contracts: Department of Water Resources.  
          
          BACKGROUND AND EXISTING LAW
          Under current law, all state contracts must be reviewed and 
          approved by the Department of General Services (DGS), with some 
          notable exceptions.  For example, all of CalTrans's contracts 
          are exempt from the DGS review.

          DGS tries to get back to the contracting department within 10 
          working days as to whether or not DGS has issues with the 
          contract.  If they do, there will be additional time required to 
          work out the details of the contract issues - sometimes just 
          days, sometimes over a month, depending on the issue with the 
          contract.  DGS also charges the contracting department for DGS's 
          time - the DGS fee for contracts for last fiscal year was 1.6% 
          of the value of the contract.

          Some of the Department of Water Resources' (DWR) contracts are 
          exempt from DGS review.  They are:
           Construction Contracts
           Architecture & Engineering Contracts
           State Water Project Contracts

          While those contracts cover a large part of DWR's contract 
          activity, it still leaves a significant number of contracts 
          subject to DGS review.  These include contracts for procurement, 
          energy, subscription services, bond funded grant programs, and 
          miscellaneous service contracts.  Last fiscal year, DWR spend 
          about $ 21.7 million for non-construction contracting.

          PROPOSED LAW
          This bill would exempt from DGS review:
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           Any contract of a type specifically mentioned and authorized 
            to be entered into by DWR under the Water Code.
           Any contract entered into by DWR that is not funded by money 
            derived from state tax sources, but rather, is funded by money 
            derived from federal and local sources.

          ARGUMENTS IN SUPPORT
          According to the author, "Each year, the Department of Water 
          Resources (DWR) enters into hundreds of contracts, often valued 
          in the millions.  Despite having an extensive contracting 
          operation staffed by dozens of experienced attorneys and 
          contract specialists, DWR must still have many of its contracts 
          reviewed and approved by the Department of General Services 
          (DGS).  This additional level of review delays the execution of 
          contracts and adds unnecessary costs to each contract."

          "SB 224 will provide DWR the same exception to DGS's contract 
          review that has been given to CalTrans.  In doing so, SB 224 
          will eliminate costly contract delays and unnecessary 
          bureaucratic review."

          ARGUMENTS IN OPPOSITION: None

          COMMENTS: None
          
          SUGGESTED AMENDMENTS: None

          SUPPORT
          Alameda County Flood Control and Water Conservation District 
          Zone 7
          Alameda County Water District
          Burbank Water and Power
          Calleguas Municipal Water District
          Castaic Lake Water Agency
          Cucamonga Valley Water District
          Desert Water Agency
          Eastern Municipal Water District
          Kern County Water Agency
          Las Virgenes Municipal Water District
          Metropolitan Water District of Southern California
          Mojave Water Agency
          San Bernardino Valley Municipal Water District
          State Water Contractors
          Three Valleys Municipal Water District
          Tulare Lake Basin Water Storage District

          OPPOSITION
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          None Received














































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