BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1068|
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THIRD READING
Bill No: SB 1068
Author: Rubio (D)
Amended: 5/17/12
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM. : 8-0, 4/17/12
AYES: DeSaulnier, Gaines, Harman, Kehoe, Lowenthal,
Pavley, Rubio, Wyland
NO VOTE RECORDED: Simitian
SENATE APPROPRIATIONS COMMITTEE : 7-0, 4/30/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
SUBJECT : Procurement of transit supplies, equipment, and
materials
SOURCE : Golden Empire Transit District
DIGEST : This bill increases the minimum value of
supplies, materials, and equipment purchases that Golden
Empire Transit and Sacramento Regional Transit may procure
by a means other than lowest, responsible bidder.
Senate Floor Amendments of 5/17/12 allow the general
manager of Sacramento Regional Transit to conduct the
solicitation of bids for materials and supplies, such as
fuel, that does not exceed $100,000.
ANALYSIS :
CONTINUED
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Existing law:
1. Requires the Golden Empire Transit (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.
5. Authorizes the Sacramento Regional Transit (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.
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4. Authorizes the general manager of RT to obtain 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."
7. Requires that GET post notice of a request for bids on
the district's procurement Internet Web site, in
addition to the newspaper notice.
Comments
Purpose of the bill . 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 brings 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 this bill will save
the agency over $80,000 per year and reduce, by up to six
weeks, the procurement time for some items.
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
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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.
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 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).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
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.
Likely minor reimbursable mandate costs, if any, related
to the revised procurement requirements imposed on GET
and RT.
SUPPORT : (Verified 5/17/12)
Golden Empire Transit District (source)
Sacramento Regional Transit District
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JJA:mw 5/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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