BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1068 (Rubio) - Procurement: Golden Empire Transit District /
Sacramento Regional Transit District.
Amended: April 9, 2012 Policy Vote: T&H 8-0
Urgency: No Mandate: Yes
Hearing Date: April 30, 2012
Consultant: Mark McKenzie
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: SB 1068 would revise the procurement requirements
for the purchase of supplies, equipment, and materials by the
Golden Empire Transit District (GET) and the Sacramento Regional
Transit District (Sac RT), including the authorization to use
best value procurement methods for contracts exceeding $100,000,
as specified.
Fiscal Impact:
Potential for increased procurement costs to the extent
contracts are not awarded to the lowest responsible bidder
(Public Transportation Account and nonstate funds). Any
increased costs would likely be offset by longer term savings
to the extent that other factors considered in a best value
procurement result in a greater overall benefit. (see staff
comments)
Likely minor reimbursable mandate costs, if any, related to
the revised procurement requirements imposed on GET and Sac
RT.
Background: Existing law requires GET to award contracts for the
purchase of supplies, equipment, and materials that exceed
$10,000 to the lowest responsible bidder, requires the board to
seek a minimum of three bids for contracts exceeding $1,000, and
requires solicitations to be published in a newspaper of general
circulation at least 10 days before bids are received. Existing
law requires Sac RT to award contracts for the purchase of
supplies, equipment, and materials that exceed $40,000 to the
lowest responsible bidder, except in an emergency declared by
four-fifths of the governing board. Existing law authorizes
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certain transit districts to award contracts for supplies,
equipment, and materials with a value exceeding $100,000 to
either the lowest responsible bidder or the responsible bidder
that provides the best value, as specified.
Proposed Law: SB 1068 would make the following changes to the
procurement requirements for purchases of supplies, equipment,
and materials by GET and Sac RT:
Authorizes the districts to award contracts with a value
greater than $100,000 on the basis of either lowest
responsible bidder or "best value," defined 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 bid solicitation documents.
Requires the districts, to the extent practicable, to obtain a
minimum of three quotations, either written or oral, that
permit price comparison for contracts with a value of $2,500
to $100,000 ($3,000 to $100,000 for Sac RT). These contracts
would still be awarded to the lowest responsible bidder, but
the bill relieves the entities from formal bidding
requirements.
Requires all GET bid notices to be published on the agency's
website.
Related Legislation: The Legislature has provided similar
procurement authority to other transit districts in recent
years. AB 116 (Beall) Chapter 408/2009 authorized similar
procurement authority to the Santa Clara Valley Transportation
Authority, the Alameda-Contra Costa Transit District, the San
Mateo County Transit District, and the Golden Gate Bridge,
Highway and Transportation District. SB 1687 (Murray) Chapter
814/2006 provided similar procurement authority to the Bay Area
Rapid Transit District and the Los Angeles County Metropolitan
Transportation Authority. SB 959 (Kehoe) Chapter 557/2005,
authorized similar procurement authority to the San Diego
Metropolitan Transit System.
Staff Comments: By allowing GET and Sac RT to procure supplies,
equipment, and materials using criteria other than price, the
bill could result in higher costs for certain contracts. These
costs could be offset by longer term savings if items are
procured using best value, to the extent that factors such as
life-cycle costs, quality, and other intangible benefits (the
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inclusion of warranties, training, and maintenance for certain
items), when considered together with price, result in a greater
overall benefit. In addition, use of best value procurement
methods could increase the ability of these entities to
participate in regional cooperative purchasing agreements,
resulting in benefits related to economies of scale.
This bill would not necessarily authorize sole source
procurement of supplies, equipment, and materials for contracts
with a value of less than $100,000, although the phrase "to the
extent practicable" provides some flexibility to secure fewer
than three bids on these contract solicitations. The bill does
establish a less formal, but still competitive process for the
procurement of relatively small contracts. This process would
result in moderate cost savings due to decreased advertising,
reprographics, and staff costs for these smaller contracts.
Recommended Amendments: The bill should be amended to strike
Section 4 from the bill and replace it with the following local
request mandate disclaimer provision to ensure there is no
obligation for state reimbursement of any mandated costs:
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution
because the only costs that may be incurred by a local agency or
school district are the result of a program for which
legislative authority was requested by that local agency or
school district, within the meaning of Section 17556 of the
Government Code and Section 6 of Article XIIIB of the California
Constitution.