BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 741
                                                                  Page  1

          Date of Hearing:   July 6, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                 SB 741 (Dutton) - As Introduced:  February 18, 2011 

          Policy Committee:                              Business and 
          Professions  Vote:                            9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill eliminates the December 31, 2011 sunset date on the 
          Department of General Services' (DGS) Alternative Protest 
          Process (APP), which is used on state contracts in order to 
          expedite a decision regarding a protest using arbitration.

           FISCAL EFFECT  

          Ongoing administrative cost savings related to the bid protest 
          phase of state contracts and to state contracting costs in 
          general.

           COMMENTS  

           Background and Purpose  . The APP was established as a pilot 
          project through AB 1159 (Bowen)/Chapter 762 of 1997, and was 
          subsequently extended by SB 951 (Committee on Governmental 
          Organization)/Chapter 610 of 2001and by SB 837 (Dutton)/Chapter 
          272 of 2005. 

          Any unsuccessful bidder may appeal or protest the proposed award 
          of a state contract. If the issues cannot be resolved between 
          the parties, the California Victim Compensation and Government 
          Claims Board decides the protest. A contract under protest 
          cannot be awarded until the protest is resolved, thus this 
          process can be both time-consuming and expensive. 

          Under the APP, DGS is required to issue a protest decision 
          within 45 days using arbitration, is authorized to dismiss 
          frivolous protests, and state agencies may issue an interim 
          contract with a supplier despite a pending protest decision. 








                                                                  SB 741
                                                                  Page  2

          From July 1, 2000 to June 30, 2009, DGS approved 22% of all 
          solicitations for participation in the APP.  Protests 
          administered under the APP were resolved in half the time, on 
          average, as under the traditional process, with no significant 
          subsequent challenges in the courts.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081