BILL ANALYSIS �
SB 835
Page 1
SENATE THIRD READING
SB 835 (Wolk)
As Amended June 20, 2011
Majority vote
SENATE VOTE :37-0
BUSINESS & PROFESSIONS 6-1 APPROPRIATIONS 10-5
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|Ayes:|Hayashi, Allen, Butler, |Ayes:|Fuentes, Blumenfield, |
| |Eng, Hill, Ma | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Dickinson, Hill, Lara, |
| | | |Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Smyth |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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SUMMARY : Expands the Best Value Construction Contract Pilot
Program (Best Value Pilot Program) to all University of
California (UC) campus construction projects statewide valued
over $1 million, and extends the sunset date of the Best Value
Pilot Program to January 1, 2017. Specifically, this bill :
1)Expands the Best Value Pilot Program to all UC campus
construction projects statewide and only for construction
projects valued over $1 million.
2)Clarifies that the UC Regents will adopt and publish
guidelines for evaluating the qualifications of bidders when
awarding contracts based on best value procedures.
3)Requires the UC Regents to submit a report to the Legislature
regarding the Best Value Pilot Program, as specified, by
January 1, 2016.
4)Sunsets the Best Value Pilot Program on January 1, 2017.
5)Redefines "best value" to mean a procurement process whereby
the lowest responsible bidder may be selected on the basis of
objective criteria for evaluating the qualifications of
SB 835
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bidders with the resulting selection representing the best
combination of price and qualifications.
6)Redefines "University" to mean all UC campuses, including the
medical centers.
7)Makes technical and clarifying changes.
EXISTING LAW :
1)Establishes, until January 1, 2012, a Best Value Pilot Program
authorizing the University of California, San Francisco (UCSF)
to award contracts based on best value procedures.
2)Requires UC Regents to submit a report to the Legislature
regarding the pilot program, as specified, by January 1, 2010.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Based on the results to date of the pilot program at UCSF, the
university should realize significant annual savings,
potentially in the tens of millions, in contract and contract
administration costs for the next five years.
2)Costs for the required report are minor and absorbable.
COMMENTS : According to the author, "The pilot program for best
value construction at UCSF is set to expire January 1, 2012. SB
835 will extend the sunset date to January 1, 2017, and expand
the pilot to all the UC campuses."
UC is generally required by existing state law to let any
contract for a construction project to the lowest responsible
bidder. The sponsor, UC, has discovered that for many projects,
particularly complex projects such as large research facilities
and medical centers, the lowest bidder does not always deliver
the project on time and at the bid amount.
SB 667 (Migden), Chapter 367, Statutes of 2006, established the
Best Value Pilot Program at UCSF. This five-year pilot program
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authorized UCSF to use best value selection. Under this
process, UC prequalifies bidders, then evaluates the bid and
assigns a qualification score based upon five factors, including
the bidder's financial condition, relevant experience,
demonstrated management competency, labor compliance, and safety
record. UC then divides each bidder's price by its
qualification score. The lowest resulting cost per quality
point represents the best value bid.
Since the Best Value Pilot Program was initiated, UCSF was
awarded 30 contracts totaling $960 million under the program
(out of a total of 228 construction contracts totaling $1.3
billion entered into during the same period), and their
experience with these projects have demonstrated that best value
selection has been advantageous to UCSF by: decreasing bid
protests, communication problems, disputes, the need for
multiple inspections and rework, change order requests and
claims, and litigation; increasing incentives for contractors to
perform high-quality work safely, while adhering to high-strike
standards; increasing the likelihood of contractors staffing a
project with their best workers and selection of subcontractors
most appropriate for the work; and, reducing administrative
oversight and contract or project management staff time.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301
FN: 0001659