BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 1068
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: RUBIO
VERSION: 4/9/12
Analysis by: Larry Baskett FISCAL: YES
Hearing date: April 17, 2012
SUBJECT:
Procurement of transit supplies, equipment, and materials
DESCRIPTION:
This bill increases the minimum value of supplies, materials,
and equipment purchases that Golden Empire Transit (GET) and
Sacramento Regional Transit (RT) may procure by a means other
than lowest, responsible bidder.
ANALYSIS:
Existing law:
1. Requires the GET Board to seek at least three
quotations, written or oral, for any procurement over
$1,000.
2. Authorizes GET to award contracts for supplies,
equipment, and materials valued at $10,000 or more to the
lowest responsible bidder.
3. Authorizes GET to award contracts for individual fuel
orders valued at $15,000 or more to the lowest responsible
bidder.
4. Requires GET's bid request notices to be published in a
newspaper at least 10 days before the due date. The GET
Board may choose to reject all bids and re-advertise or, on
a four-fifths vote, to bypass the next round of bidding and
instead make the purchase on the open market.
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5. Authorizes the RT Board to award contracts for supplies,
equipment, and materials valued at $40,000 or more to the
lowest responsible bidder.
6. Allows exceptions to the above requirements for
emergencies, as determined by a four-fifths vote of the
board.
This bill :
1. Distinguishes between expenditures on new construction
and to which the changes in the bill do not apply, and
supplies, equipment, and materials to which the changes do
apply.
2. Removes the distinction between fuel and other supplies
for purposes of procurement for GET.
3. Relaxes the three-quotation minimum for procurements of
$2,500 to $100,000 from mandatory applicability to only
applying "to the extent practicable" for GET.
4. Authorizes the three-quotation minimum, applicable "to
the extent practicable," for procurements of $3,000 to
$100,000 for RT.
5. Changes the competitive process requirement from a
"lowest responsible bidder" standard for procurements over
$10,000 (GET) or $40,000 (RT) to a choice of a "best value"
or a "lowest responsible bidder" standard for procurements
over $100,000.
6. Defines "best value" as "the overall combination of
quality, price, and other elements of a proposal that, when
considered together, provide the greatest overall benefit
in response to the requirements described in the
solicitation documents."
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7. Requires that GET post notice of a request for bids on
the district's procurement Internet website, in addition to
the newspaper notice.
COMMENTS:
1. Purpose . The intent of the bill is to accelerate
procurement for minor items, save procurement costs, and
benefit from a bid selection process that accounts for
value and not solely the lowest dollar amount. The bill
would bring GET and RT into closer conformity with
contemporary procurement practices of similar agencies and
Federal Transit Administration (FTA) Simplified Acquisition
Procedures (SAP). It is similar to SB 1687 (Murray),
Chapter 814, Statutes of 2006, as well as AB 116 (Beall),
Chapter 408, Statues of 2009, which dealt with other
transit districts. GET estimates that the bill would save
the agency over $80,000 per year and would reduce by up to
6 weeks the procurement time for some items.
2. Accountability . Regarding the balance between
efficiency and accountability when awarding procurement
contracts, the increased monetary thresholds in the bill
give more discretion to each district's board and general
manager. According to GET, the general manager could
decide upon procurement awards under the $100,000 threshold
($10,000 in existing law) without GET Board approval. In
the case of RT, the three-quote minimum is a new
authorization for RT. In addition, the "best value" bid
evaluation allows more discretion, enabling more optimum
benefits from purchases in the long run. This puts a burden
on the board to ensure the discretion is exercised in an
evenhanded way.
3. Uniformity . The state has updated the procurement
practice requirements for some transit districts in this
way but not for others. For example, the three-quote
minimum in the bill applies to amounts over $2,500 for GET,
which matches current law for Alameda-Contra Costa Transit
District, the Santa Clara Valley Transportation Authority,
the Golden Gate Bridge, Highway, and Transportation
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District, the San Mateo County Transit District,
Monterey-Salinas Transit District, and for others, while
for RT the bill's threshold is $3,000. FTA recommended
procurement threshold for agencies receiving federal grants
are at $2,500 (and $100,000 for larger purchases, matching
this bill) but may be changing to $3,000 (and $150,000).
4. Permanence . The monetary thresholds in the bill are
fixed values and are not indexed to inflation.
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 11, 2012)
SUPPORT: Golden Empire Transit District (sponsor)
Sacramento Regional Transit District
OPPOSED: None received.