BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1857|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 1857
Author: Frazier (D)
Amended: 3/28/14 in Assembly
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 10-1, 6/24/14
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Pavley, Roth
NOES: Wyland
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 60-14, 5/27/14 - See last page for vote
SUBJECT : Caltrans equipment procurement
SOURCE : Transportation California
DIGEST : This bill permits the California Department of
Transportation (Caltrans) to conduct a pilot program to purchase
and equip heavy mobile fleet vehicles and special equipment by
means of best value procurement.
ANALYSIS : Existing law requires the Department of General
Services (DGS) to investigate and establish the need for
acquiring new state-owned motor vehicles and for all state
agencies to acquire motor vehicles through, or under the
supervision of, DGS. Existing law further requires state
CONTINUED
AB 1857
Page
2
agencies to award contracts for goods and services to the lowest
responsible bidder, with a few limited exceptions.
This bill:
1.Permits Caltrans to conduct a pilot program to purchase and
equip heavy mobile fleet vehicles and special equipment by
means of best value procurement.
2.Defines best value procurement as a method of selecting a
proposal based on an evaluation of the following factors in
addition to price:
Total cost of ownership, including repair and
maintenance costs
Product performance, productivity, and safety standards
The supplier's ability to perform to the contract
requirements
Environmental benefits, including reduction of
greenhouse gas emissions, reduction of air pollutant
emissions, or reduction of toxic or hazardous materials
1.Requires Caltrans to develop and utilize a scoring method
based on these factors, with predetermined weighted values, as
well as price in determining the winning bid.
2.Limits Caltrans' best value procurements to $20 million
annually.
3.Requires DGS, by June 1, 2018, to evaluate Caltrans'
experience with best value procurement and for Caltrans to
post the evaluation on its website.
4. Repeals this pilot program on January 1, 2019.
Comments
According to the National Association of State Procurement
Officials' 2011-2012 Survey of State Procurement Practices, 34
states use full life-cycle costs to determine contract awards to
vendors. Studies suggest that results have generally been good
when public agencies utilize best value procurement, despite the
long-standing precedence for the low-bid procurement system.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
CONTINUED
AB 1857
Page
3
Local: No
According to the Senate Appropriations Committee:
Unknown annual increases in vehicle and equipment purchase
costs, if best value procurement results in higher initial
costs, likely offset by life-cycle cost savings over time.
(State Highway Account)
One-time costs to DGS, likely in the range of $150,000 in
2017-18, to prepare an evaluation of Caltrans' best value
procurement pilot program. (General Fund)
There could be a shift in administrative workload from DGS to
Caltrans to the extent that Caltrans would have purchased
these vehicles through DGS procurement absent the bill.
SUPPORT : (Verified 8/15/14)
Transportation California (source)
California Manufacturers & Technology Association
California Taxpayers Association
Caterpillar, Inc.
John Deere
AFSCME
South Coast Air Quality Management District
ARGUMENTS IN SUPPORT : According to the author, this bill is
intended to provide Caltrans with an optional procurement method
to determine whether overall savings may be achieved by
evaluating factors other than price when purchasing heavy-duty
vehicles and equipment. While the standard lowest responsible
bid procurement process provides a clear and objective measure
to ensure the lowest initial procurement cost, it prevents
Caltrans from considering other value-related factors when
purchasing heavy vehicles. The author suggests that, while
initial procurement costs may be higher with best value
procurement, through this alternative procurement method
Caltrans will realize overall life-cycle cost savings.
Writing in support of this bill, Caterpillar Inc. and its
California dealers claim that the state would benefit from
moving to a life-cycle cost model for procuring heavy vehicles
and equipment. They note that allowing Caltrans to make a
CONTINUED
AB 1857
Page
4
broader based evaluation of equipment purchase options will
attract qualified bidders and hold them accountable for
delivering the highest quality product. They also note that the
result of including "downstream" operating costs associated with
equipment purchase decisions into solicitations and bids will
likely result in lower overall costs. Caltrans subjects much of
its heavy equipment to strenuous, taxing work, and therefore
factoring the cost of the equipment over its entire lifespan
appears reasonable and responsible.
ASSEMBLY FLOOR : 60-14, 5/27/14
AYES: Achadjian, Alejo, Ammiano, Bloom, Bocanegra, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Dahle, Daly, Dickinson, Eggman,
Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gray, Hall, Roger Hern�ndez, Holden, Jones-Sawyer, Levine,
Linder, Lowenthal, Maienschein, Medina, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada,
Atkins
NOES: Allen, Conway, Donnelly, Beth Gaines, Gorell, Grove,
Hagman, Harkey, Jones, Mansoor, Melendez, Wagner, Waldron,
Wilk
NO VOTE RECORDED: Bigelow, Ch�vez, Logue, Patterson,
Quirk-Silva, Vacancy
JA:nl 8/16/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED