BILL ANALYSIS �
SB 1280
Page 1
SENATE THIRD READING
SB 1280 (Pavley)
As Amended August 13, 2012
Majority vote
SENATE VOTE :33-0
HIGHER EDUCATION 8-0 APPROPRIATIONS 17-0
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|Ayes:|Block, Olsen, Brownley, |Ayes:|Fuentes, Harkey, |
| |Fong, Galgiani, Lara, | |Blumenfield, Bradford, |
| |Miller, Portantino | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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SUMMARY : Authorizes a California Community College (CCC)
district and the University of California (UC), until January 1,
2018, to award contracts for supplies and materials over $50,000
and $100,000, respectively, to the lowest responsible bidder
offering the "best value," as determined pursuant to specified
policies adopted by district governing boards and by UC.
Specifically, this bill :
1) Defines "best value" as the most advantageous balance of
price, quality, service, performance, and other elements as
defined by the CCC district board or UC.
2) Specifies procedures for CCC districts and UC to follow
in advertising, evaluating, and awarding such contracts.
3) Requires CCC districts using the above authority to
report specified information to the Chancellor's Office by
January 1, 2016, and requires the Legislative Analyst's
Office (LAO) to request this information from the CCC
Chancellor's Office by July 1, 2016, and requires UC to
provide the LAO with similar information by that date.
4) Requires the LAO to report to the Legislature by
February 1, 2017, on CCC districts' and UC's use of this
contracting method, including any recommendation as to
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whether this authority should be continued.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Minor absorbable one-time costs for UC and CCC districts to
provide the required information for the LAO, and for the LAO
to complete the required reports.
2)Any costs to districts would be non-reimbursable, as the bill
is discretionary.
3)To the extent UC and CCC districts successfully implement best
value purchasing, significant savings could be realized over
time. UC estimates that it could save up to $20 million in
five years in computer software and hardware alone.
COMMENTS : According to the author, UC and CCC can only
consider up-front costs for the acquisition of materials,
equipment, services, and supplies. In many cases, this process
prevents these public institutions from purchasing products in
the most cost effective manner. This bill would allow, on a
five-year pilot basis, UC and CCC to structure a competitive bid
process using best value procurement, allowing them to consider
factors such as life-cycle costs, servicing costs, durability,
and factors other than price in order to stretch their scarce
funds. (The California State University has had statutory
authority to do best value contracting for many years.)
Best value contracting has generally been recognized as a viable
alternative for construction projects and for the acquisition of
technology, telecommunications and related equipment.
This bill proposes best value contracting for the acquisition of
goods and services. While this would be the first attempt
authorized for educational entities, best value has been
authorized and used by municipal utility districts (MUDs) for
procurement of individual supplies and materials purchases over
$50,000 �AB 793 (Cox), Chapter 665, Statutes of 2001].
An evaluation of this authority by LAO found that while low-cost
purchasing still has an important role in government
procurement, getting the best value for a product or service
does not always mean choosing the lowest bidder. LAO also noted
that an organization must make the up-front investment necessary
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to support best value procurement, and procurement managers must
ensure staff are properly trained on the process and must help
their staff develop requirements that promote the organization's
strategic goals. LAO noted that, early on, best value
procurements can be time-consuming and cumbersome as bid
evaluation criteria are developed, but that with repeated use,
agencies can perform best value procurements with a similar
level of effort as traditional procurements. According to LAO,
based on the limited experience to date, best value procurement
authority appears to provide MUDs with an important tool.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960
FN: 0004749