Amended in Assembly May 14, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1971

Introduced by Assembly Member Bocanegra

February 19, 2014

An act to add and repeal Article 3.3 (commencing with Section 20119) of Chapter 1 of Part 3 of Division 2 of the Public Contract Code, relating to best value procurement.

LEGISLATIVE COUNSEL’S DIGEST

AB 1971, as amended, Bocanegra. begin delete Public contracts: school end delete begin insert School end insert districts: begin delete competitive bidding: end delete best begin delete value. end delete begin insert value procurement: pilot program. end insert

The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.

This bill would begin delete authorize the end delete begin insert establish a pilot program to authorize the Los Angeles Unified School District and 3 other unspecified school districts to use, before January 1, 2017, a best value procurement method for end insert bid evaluation and selection for public projects that exceed begin delete $1,000,000 to be determined by the best value for the school district. end delete begin insert $1,000,000. end insert The bill would establish various requirements applicable to the use of the best value procurement method begin delete for the evaluation and selection of public projects by school districts end delete under this authorization. begin insert The bill would require a school district that uses the best value procurement method to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2020. end insert

begin insert

This bill would make legislative findings and declarations as to the necessity of a special statute for a limited number of school districts of varying sizes, including, but not limited to, the Los Angeles Unified School District.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 3.3 (commencing with Section 20119) is
added to Chapter 1 of Part 3 of Division 2 of the Public Contract
Code, to read:

 

Article 3.3.  School begin delete Districts -- Best end delete begin insert Districts--Best end insert Value
Procurement begin insert Pilot Program end insert

 

20119.  

(a) It is the intent of the Legislature to enable school
districts to use cost-effective options for building and modernizing
school facilities. The Legislature has recognized the merits of the
best value procurement method process in the past by authorizing
its use for projects undertaken by the University of California.

(b) The Legislature also finds and declares that school districts
using the best value procurement method require a clear
understanding of the roles and responsibilities of each participant
in the best value process. As reflected in the University of
California report to the Legislature, the benefits of a best value
procurement method include a reduction in contract delays, change
orders, and claims producing a savings in both contract costs and
administration.

(c) It is the intent of the Legislature to provide an optional,
alternative procedure for bidding and building school construction
projects.

(d) In addition, it is the intent of the Legislature that the best
value procurement method is not intended to change in any manner
any guideline, criteria, procedure, or requirement of the governing
board of the school district to let any contract for a project to the
lowest responsible bidder or else reject all bids.

20119.1.  

As used in this article:

(a) “Best value” means a procurement process whereby the
selected bidder may be selected on the basis of objective criteria
for evaluating the qualifications of bidders with the resulting
selection representing the best combination of price and
qualifications.

(b) “Best value contract” means a begin insert competitively bid end insert contract
entered into pursuant to the provisions of this article.

(c) “Best value contractor” means a properly licensed person,
firm, or corporation that submits a bid for, or is awarded, a best
value contract.

(d) “Demonstrated management competency” means the
experience, competency, capability, and capacity of the proposed
management staffing to complete projects of similar size, scope,
or complexity.

(e) “Financial condition” means the financial resources needed
to perform the contract. The criteria used to evaluate a bidder’s
financial condition shall include, at a minimum, capacity to obtain
all required payment bonds, and required insurance.

(f) “Labor compliance” means the ability to comply with, and
past performance with, contract and statutory requirements for the
payment of wages and qualifications of the workforce. The criteria
used to evaluate a bidder’s labor compliance shall include, at a
minimum, the bidder’s ability to comply with the apprenticeship
requirements of the California Apprenticeship Council and the
Department of Industrial Relations, its past conformance with such
requirements, and its past conformance with requirements to pay
prevailing wages on public works projects.

(g) “Project” has the same meaning as “public project” begin delete is end delete begin insert as end insert
defined in subdivision (c) of Section 22002.

(h) “Qualifications” means financial condition, relevant
experience, demonstrated management competency, labor
compliance, the safety record of the bidder, and to the extent
relevant, the preceding qualifications as they pertain to all
subcontractors proposed to be used by the bidder for designated
portions of the work.

(i) “Relevant experience” means the experience, competency,
capability, and capacity to complete projects of similar size, scope,
or complexity.

(j) “Safety record” shall be deemed “acceptable” if its experience
modification rate for the most recent three-year period is an average
of 1.00 or less, and its average total recordable injury or illness
rate and average lost work rate for the most recent three-year period
do not exceed the applicable statistical standards for its business
category, or if the bidder is a party to an alternative dispute
resolution system as provided for in Section 3201.5 of the Labor
Code. If the experience modification rate for the most recent
three-year period is or was 1.00 or higher, a bidder may attach a
letter of explanation that the school district may review and take
into consideration when evaluating the bidder’s acceptable safety
record.

(k) (1) “Skilled and trained workforce” means a workforce that
meets both of the following criteria, as applicable:

(A) All the workers are either registered apprentices or skilled
journeypersons.

(B) (i) As of January 1, 2015, at least 30 percent of the skilled
journeypersons are graduates of an apprenticeship program for the
applicable occupation that was either approved by the Chief of the
Division of Apprenticeship Standards pursuant to Section 3075 of
the Labor Code or located outside California and approved for
federal purposes pursuant to the apprenticeship regulations adopted
by the federal Secretary of Labor.

(ii) As of January 1, 2016, at least 45 percent of the skilled
journeypersons are graduates of an apprenticeship program for the
applicable occupation that was either approved by the Chief of the
Division of Apprenticeship Standards pursuant to Section 3075 of
the Labor Code or located outside California and approved for
federal purposes pursuant to the apprenticeship regulations adopted
by the federal Secretary of Labor.

(iii) As of January 1, 2017, at least 60 percent of the skilled
journeypersons are graduates of an apprenticeship program for the
applicable occupation that was either approved by the Chief of the
Division of Apprenticeship Standards pursuant to Section 3075 of
the Labor Code or located outside California and approved for
federal purposes pursuant to the apprenticeship regulations adopted
by the federal Secretary of Labor.

(2) A school district and a contractor are not required to track
the percentage of journeypersons that are graduates of an
apprenticeship program if the governing board of the school district
has entered into a project labor agreement that will bind all
contractors and subcontractors performing work on the project and
complies with Section 2500.

20119.2.  

(a)  begin insert This article provides for a pilot program for four
school districts of different sizes to use best value procurement for
projects over one million dollars ($1,000,000). end insert

begin insert (b) end insert begin insert   end insert The governing begin delete board end delete begin insert boards end insert of begin delete any end delete begin insert the following four end insert school
begin delete district, end delete begin insert districts, end insert for projects over one million dollars ($1,000,000),
begin insert before January 1, 2017, end insert may use the best value procurement
method in accordance with this begin delete article. end delete begin insert article: end insert

begin insert

(1) The Los Angeles Unified School District.

end insert begin insert

(2) A small school district, ____.

end insert begin insert

(3) A medium-sized school district, ____.

end insert begin insert

(4) A large school district, ____.

end insert begin delete

(b)

end delete

begin insert (c) end insert  The governing board of any school district shall let any
contract for a project pursuant to this article to the selected bidder
that represents the best value or else reject all bids.

begin delete

(c)

end delete

begin insert (d) end insert  The bidder may be selected on the basis of the best value to
the governing board of the school district. In order to implement
this method of selection, the governing board of the school district
shall adopt and publish procedures and required guidelines for
evaluating the qualifications of the bidders that ensure the best
value selections by the school district are conducted in a fair and
impartial manner. These procedures and guidelines shall conform
to this article and shall be mandatory for the school district when
using best value selection.

begin delete

(d)

end delete

begin insert (e) end insert  If the governing board of the school district deems it to be
for the best interest of the school district, the governing board of
the school district begin delete may, end delete on the refusal or failure of the successful
bidder for a project to execute a tendered contract, begin insert may end insert award it
to the second bidder that represents the best value. If the second
bidder fails or refuses to execute the contract, the governing board
of the school district may likewise award it to the third bidder.

20119.3.  

The governing board of the school district shall
proceed in accordance with the following when awarding best
value contracts under this article:

(a) The governing board of the school district shall prepare a
solicitation for bids and give notice pursuant to Section 20112.

(b) The governing board of the school district shall establish a
procedure to prequalify bidders pursuant to Sections 20101 and
20111.6. Information submitted by the bidder as part of the
evaluation process shall not be open to public inspection to the
extent that information is exempt from disclosure under the
California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).

(c) Each solicitation for bids shall do all of the following:

(1) Invite prequalified bidders to submit sealed bids in the
manner prescribed by this article.

(2) Include a section identifying and describing the following:

(A) Criteria that the governing board of the school district will
consider in evaluating the qualifications of the bidders.

(B) The methodology and rating or weighting system that will
be used by the governing board of the school district in evaluating begin delete bids and specifically whether proposals will be rated according to
numeric or qualitative values. end delete begin insert bids. end insert

(C) The relative importance or weight assigned to the criteria
for evaluating the qualifications of bidders identified in the request
for bids.

(d) Final evaluation of the best value contractor shall be done
in a manner that prevents begin insert the identity of the bidders and the end insert cost
or price information from being revealed to the committee
evaluating the qualifications of the bidders prior to completion
and announcement of that committee’s decision. begin insert A meeting to
evaluate bids shall be open to the public. end insert

20119.4.  

Selection of the best value contractor shall be made
as follows:

(a) (1) The governing board of the school district shall evaluate
the qualifications of the bidders based solely upon the criteria set
forth in the solicitation documents, and shall assign a qualification
score to each bid.

(2) Factors in determining a qualification score shall include,
but are not limited to, price, relevant experience, skilled and trained
workforce, and acceptable safety record and shall be weighted in
accordance with the following:

(A) At least 50 percent of the total weight or consideration shall
be given to the following factors: relevant expertise, skilled and
trained workforce, and acceptable safety record. A factor listed in
this subparagraph shall not make up less than 15 percent of the
total weight or consideration.

(B) No more than 50 percent of the total weight or consideration
shall be given to price. A bidder that qualifies as a certified small
business shall receive a 5-percent bid preference.

(b) The award of the contract shall be made to the bidder whose
bid is determined, by the school district in writing, to be the best
value to the governing board of the school district. To determine
the best value contractor, the governing board of the school district
shall divide each bidder’s price by its qualifications score. The
lowest resulting cost per quality point will represent the best value
bid.

(c) The governing board of the school district shall issue a
written decision of its contract award.

(d) Upon issuance of a contract award, the governing board of
the school district shall publicly announce its award identifying
the best value contractor to which the award is made, the project,
the project price, and the selected best value contractor’s score
based on the qualifications criteria for evaluating the bidders listed
in the request for bids. The notice of award shall be made public
and include the score of the selected best value contractor in
relation to all other responsive bidders and their respective prices.
The names of the remaining responsive bidders may be concealed
upon the request of the bidders, in which case the governing board
of the school district shall determine an alternative method for
publicly announcing its award of the contract. The contract file
shall include documentation sufficient to support the decision to
award.

begin insert

begin insert 20119.5. end insert   

(a) (1) A school district that uses the best value
procurement method pursuant to this article shall submit to the
Legislative Analyst the following reports completed by an
independent third party:

(A) An interim report on or before July 1, 2017.

(B) A final report on or before January 1, 2019.

(2) A report shall include, but is not limited to, the following
information:

(A) A description of the projects awarded using the best value
procedures.

(B) The contract award amounts.

(C) The best value contractors awarded the projects.

(D) A description of any written protests concerning any aspect
of the solicitation, bid, or award of the best value contracts,
including the resolution of the protests.

(E) A description of the prequalification process.

(F) The criteria used to evaluate the bids, including the
weighting of the criteria and an assessment of the effectiveness of
the methodology.

(G) If a project awarded under this article has been completed,
an assessment of the project performance, to include a summary
of any delays or cost increases.

(b) (1) The Legislative Analyst shall submit an interim report
to the appropriate policy and fiscal committees of the Legislature
on the use of the best value procurement method by school districts
on or before January 1, 2018, and a final report on or before July
1, 2019. The report may include the information provided from
the school district reports pursuant to subdivision (a) and any
pertinent information that the Legislative Analyst deems instructive
in evaluating whether the best value procurement method should
be continued, expanded, or prohibited.

(2) The requirement for submitting a report imposed pursuant
to this subdivision is inoperative on January 1, 2020, pursuant to
Section 10231.5 of the Government Code.

end insert

begin delete 20119.5. end delete
begin insert 20119.6. end insert   

This article shall remain in effect only until January
1, begin delete 2022, end delete begin insert 2020, end insert and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, begin delete 2022, end delete begin insert 2020, end insert deletes or
extends that date.

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

The Legislature finds and declares that a special law
is necessary and that a general law cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution because of the need to establish a pilot project for a
limited number of school districts of varying sizes, including, but
not limited to, the Los Angeles Unified School District, to determine
the potential benefits and consequences of using best value
procurement to facilitate infrastructure improvements and ease
fiscal impacts.

end insert