BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1971 (Bocanegra) - LAUSD: Best Value Procurement Pilot
Program
Amended: July 2, 2014 Policy Vote: Education 4-1
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Jacqueline Wong-Hernandez
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1971 establishes a pilot program to authorize
the Los Angeles Unified School District (LAUSD) to use a best
value procurement method for public projects that exceed $1
million, and requires submission of specified reports on the use
of this procurement method. These provisions sunset on January
1, 2020.
Fiscal Impact: This bill will not result in any direct state
costs, but could put pressure on state bond funds, to the extent
local choices affect them.
LAUSD: Unknown, but potentially significant immediate and
long-term costs and/or savings to the extent that (1) the
district elects to use a best value procurement method, and
(2) that the method, which is intended to save LAUSD money,
actually does save money. This bill is permissive, and would
also allow LAUSD to continue to choose the lowest
responsible bidder.
Legislative Analyst's Office (LAO): Minor and absorbable
costs for the LAO to complete an interim and final report on
LAUSD's use of best value procurement.
Background: Existing law requires the governing board of a
school district, to competitively bid, and award to the lowest
responsible bidder, any contract for a public project involving
an expenditure of $15,000 or more. (Public Contract Code �
20111)
Current law, until January 1, authorizes a pilot program at the
University of California (UC) to award construction contracts on
a "best value" basis, rather than just to the lowest bidder.
(Public Contract Code �10506.4)
AB 1971 (Bocanegra)
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Current law defines "best value," for purposes of the UC, as a
procurement process whereby the lowest responsible bidder may be
selected on the basis of objective criteria with the resulting
selection representing the best combination of price and
qualifications. (Public Contract Code � 10506.5)
Proposed Law: This bill establishes a pilot program, until
January 1, 2020, to authorize
the governing board of the LAUSD to use best value procurement,
pursuant to policies adopted and published by the local
governing board, for awarding construction contracts, as
specified.
This bill also establishes reporting requirements related to the
authority to the use best value under the bill's provisions.
More specifically it:
a) Requires a school district that uses best value
procurement to submit an interim report and a final
report, conducted by an independent third party,
containing specified information on the use of best value
procurement to the Legislative Analyst's Office (LAO) by
July 1, 2017, and January 1, 2019, respectively.
b) Requires the LAO to submit an interim report and
a final report, on the use of best value procurement, as
specified, to the appropriate policy and fiscal committees
of the Legislature by January 1, 2018, and July 1, 2019,
respectively, to evaluate whether the best value
procurement method should be continued, expanded, or
prohibited.
Staff Comments: This bill gives the governing board of the LAUSD
the authority to use best value procurement on projects above $1
million, but does not require the district to do so. To the
extent this bill results in the LAUSD awarding of contracts to
other than the lowest bidder, contracting costs could increase.
It is unclear whether the resultant savings from reduced change
orders and delays would offset these costs.
AB 1971 (Bocanegra)
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