California Legislature—2013–14 Regular Session

Assembly Bill No. 2722

Introduced by Assembly Member Ridley-Thomas

February 21, 2014

An act to amend Section 130232 of the Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2722, as introduced, Ridley-Thomas. Los Angeles County Metropolitan Transportation Authority: contracting.

Existing law creates the Los Angeles County Metropolitan Transportation Authority (LACMTA), with various powers and duties with respect to transportation planning, programming, construction, and operations.

Existing law authorizes LACMTA to provide for a small business preference of 5% of the lowest responsible bidder meeting specifications, with respect to contracts in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. Existing law also authorizes LACMTA to establish a subcontracting participation goal for small businesses on contracts financed with nonfederal funds and to grant a preference of 5% to the lowest responsible bidders that meet that goal. These small business contract preference provisions do not apply to contracts for professional services involving private architectural, landscape architectural, engineering, land surveying, or construction management.

This bill would delete the restrictions, thereby authorizing LACMTA to expand small business contract preference provisions to these professional services contracts. The bill would provide similar preferences with respect to disabled veteran business enterprises, as defined. The bill would allow the preferences to be in an amount of up to 10% of the lowest responsible bidder. The bill would authorize LACMTA to establish a mandatory subcontracting participation goal for small business or disabled veteran business enterprises on contracts financed with nonfederal funds and to set additional guidelines for local preference purposes. The bill would authorize LACMTA to award certain contracts of specified values to small business or disabled veteran business enterprises if LACMTA obtains price quotations from 2 or more of those business, or to small businesses or disabled veteran business enterprises that are the lowest responsible bidder or best value proposer among those businesses, as specified.

The bill would also authorize LACMTA, in general, to award annual contracts that do not exceed $3,000,000 for repair or repetitive work to be done according to unit prices.

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.  

Section 130232 of the Public Utilities Code is
amended to read:

130232.  

(a) Except as provided in subdivision (f), purchase
of all supplies, equipment, and materials, and the construction of
all facilities and works, when the expenditure required exceeds
twenty-five thousand dollars ($25,000), shall be by contract let to
the lowest responsible bidder. Notice requesting bids shall be
published at least once in a newspaper of general circulation. The
publication shall be made at least 10 days before the date for the
receipt of the bids. The commission, at its discretion, may reject
any and all bids and readvertise.

(b) Except as provided for in subdivision (f), whenever the
expected expenditure required exceeds one thousand dollars
($1,000), but not twenty-five thousand dollars ($25,000), the
commission shall obtain a minimum of three quotations, either
written or oral, that permit prices and terms to be compared.

(c) Where the expenditure required by the bid price is less than
fifty thousand dollars ($50,000), the executive director may act
for the commission.

(d) All bids for construction work submitted pursuant to this
section shall be presented under sealed cover and shall be
accompanied by one of the following forms of bidder’s security:

(1) Cash.

(2) A cashier’s check made payable to the commission.

(3) A certified check made payable to the commission.

(4) A bidder’s bond executed by an admitted surety insurer,
made payable to the commission.

(e) Upon an award to the lowest bidder, the security of an
unsuccessful bidder shall be returned in a reasonable period of
time, but in no event shall that security be held by the commission
beyond 60 days from the date that the award was made.

(f) The following provisions apply only to the Los Angeles
County Metropolitan Transportation Authority:

(1) The contract shall be let to the lowest responsible bidder or,
in the authority’s discretion, to the person who submitted a proposal
that provides the best value to the commission on the basis of the
factors identified in the solicitation when the purchase price of all
supplies, equipment, and materials exceeds one hundred fifty
thousand dollars ($150,000). “Best value” means the overall
combination of quality, price, and other elements of a proposal
that, when considered together, provide the greatest overall benefit
in response to requirements described in the solicitation documents.
The contract shall be let to the lowest responsible bidder when the
purchase price of the construction of all facilities exceeds
twenty-five thousand dollars ($25,000).

(2) The authority shall obtain a minimum of three quotations,
either written or oral, that permit prices and terms to be compared
whenever the expected expenditure required exceeds three thousand
dollars ($3,000), but not one hundred fifty thousand dollars
($150,000).

(3) The authority may purchase supplies, equipment, and
materials from a public auction sale, including public auctions
held via the Internet, using the procedures established for all other
participants in the public auction.

(4) The authority may participate in a procurement agreement
involving other public entities that is identified by a procuring
public entity or entities as a cooperative procuring agreement from
which other public entities may make purchases or enter into
contracts, and the authority may procure, and enter into contracts
for, items purchased pursuant to that procurement agreement,
notwithstanding that the authority may not be the procuring public
entity, provided the procurement agreement is awarded or entered
into by either of the following:

(A) One or more public entities or an organization of public
entities, which may include the authority.

(B) A federal, state, or local public entity.

(5) (A) Notwithstanding any other provision of law requiring
the authority to award contracts to the lowest responsible bidder,
the authority may begin delete , except as to contracts for professional services
involving private architectural, landscape architectural, engineering,
environmental, land surveying, or construction management as
defined in Sections 4525 and 4529.10 of the Government Code, end delete
do any of the following in facilitating contract awards to small
begin delete businesses end delete begin insert business or disabled veteran business enterprises end insert :

(i) Provide for a small business begin insert or disabled veteran business
enterprise end insert preference in construction, the construction component
of a design-build team, the procurement of goods, or the delivery
of services. The preference to a small business begin insert or a disabled
veteran business enterprise end insert shall be begin delete 5 end delete begin insert up to 10 end insert percent of the lowest
responsible bidder meeting specifications that provide for small
business begin insert or disabled veteran business enterprise end insert participation.

(ii) Establish a subcontracting participation goal for small
begin delete businesses end delete begin insert business or disabled veteran business enterprises end insert on
contracts financed with nonfederal funds and grant a preference
of begin delete 5 end delete begin insert up to 10 end insert percent to the lowest responsible bidders who meet
the goal.

begin insert

(iii) Establish a mandatory subcontracting participation goal
for small business or disabled veteran business enterprises on
contracts financed with nonfederal funds.

end insert begin delete

(iii)

end delete

begin insert (iv) end insert  Require bidders to make a good faith effort, in accordance
with the criteria established pursuant to subparagraph (B), prior
to the time bids are opened, to comply with the goals and
requirements established by the authority relating to participation
in the contract by small begin delete businesses end delete begin insert business or disabled veteran
enterprises end insert .

begin insert

(v) Award a contract for the acquisition of supplies, equipment,
materials, or construction that has an estimated value of more
than three thousand dollars ($3,000), but not more than two
hundred fifty thousand dollars ($250,000), to a small business or
disabled veteran business enterprise, as long as the authority
obtains price quotations from two or more small business or
certified disabled veteran business enterprises.

end insert begin insert

(vi) Award a contract for the acquisition of supplies, equipment,
or materials that has an estimated value of more than two hundred
fifty thousand dollars ($250,000), but not more than two million
dollars ($2,000,000) to the lowest responsible small business or
disabled veteran business enterprise bidder or, in the authority’s
discretion, to the small business or disabled veteran business
enterprise that submitted a proposal that provides the best value
to the authority on the basis of the factors identified in the
solicitation.

end insert begin insert

(vii) Award a contract for construction that has an estimated
value of more than two hundred fifty thousand dollars ($250,000),
but not more than five million dollars ($5,000,000), to the lowest
responsible small business or disabled veteran business enterprise
bidder.

end insert begin insert

(viii) Set additional guidelines for local preference purposes.

end insert

(B) The following shall apply to bidders under this paragraph:

(i) The bidder attended any presolicitation or prebid meetings
that were scheduled by the authority to inform all bidders of the
small business begin insert or disabled veteran business end insert enterprise program
requirements for the project for which the contract will be awarded.
The authority may waive this requirement if it determines that the
bidder is informed as to those program requirements.

(ii) The bidder identified and selected specific items of the
project for which the contract will be awarded to be performed by
small business begin insert or disabled veteran business end insert enterprises to provide
an opportunity for participation by those enterprises.

(iii) The bidder advertised, not less than 10 calendar days before
the date the bids are opened, in one or more daily or weekly
newspapers, trade association publications or trade-oriented
publications, trade journals, or other media, specified by the
authority for small business begin insert or disabled veteran business end insert
enterprises that are interested in participating in the project. This
clause applies only if the authority gave public notice of the project
not less than 15 calendar days prior to the date the bids are opened.

(iv) The bidder provided written notice of his or her interest in
bidding on the contract to the number of small business begin insert or disabled
veteran business end insert enterprises required to be notified by the project
specifications not less than 10 calendar days prior to the opening
of bids. The authority shall make available to the bidder not less
than 15 calendar days prior to the date the bids are opened a list
or a source of lists of enterprises which are certified by the
authority as small business begin insert or disabled veteran business end insert enterprises.

(v) The bidder followed up initial solicitations of interest by
contacting the enterprises to determine with certainty whether the
enterprises were interested in performing specific items of the
project.

(vi) The bidder provided interested small business begin insert or disabled
veteran business end insert enterprises with information about the plans,
specifications, and requirements for the selected subcontracting
or material supply work.

(vii) The bidder requested assistance from small business
community organizations; small business contractor groups; local,
state, or small business assistance offices; or other organizations
that provide assistance in the recruitment and placement of small
business begin insert or disabled veteran business end insert enterprises, if any are
available.

(viii) The bidder negotiated in good faith with the small business
begin insert or disabled veteran business end insert enterprises, and did not unjustifiably
reject as unsatisfactory bids prepared by any small business
enterprises, as determined by the authority.

(ix) Where applicable, the bidder advised and made efforts to
assist interested small business begin insert or disabled veteran business end insert
enterprises in obtaining bonds, lines of credit, or insurance required
by the authority or contractor.

(x) The bidder’s efforts to obtain small business begin insert or disabled
veteran business end insert enterprise participation could reasonably be
expected by the authority to produce a level of participation
sufficient to meet the goals and requirements of the authority.

(C) “Small business enterprise” as used in this paragraph begin delete , end delete means
a business enterprise that is classified as a small business under
United States Small Business Administration rules and meets the
current small business enterprise size standards found in Part 121
of Title 13 of the Code of Federal Regulations appropriate to the
type of work the enterprise seeks to perform. The authority may
establish limitations regarding the average annual gross receipts
of a small business over the previous three fiscal years and establish
limitations regarding the personal net worth of the owner of the
small business, exclusive of the value of the owner’s personal
residence.

begin insert

(D) “Disabled veteran business enterprise” as used in this
paragraph means an enterprise that has been certified as meeting
the qualifications established by subdivision (b) of Section 999 of
the Military and Veterans Code.

end insert begin insert

(6) (A) Notwithstanding any other law, the authority may award
annual contracts that do not exceed three million dollars
($3,000,000) for repair or other repetitive work, or renovation or
modification, to be done according to unit prices. The contracts
shall be awarded to the lowest responsible bidder, and shall be
based primarily on plans and specifications for typical work. No
annual contracts may be awarded under these provisions if the
total cost of the contract exceeds five hundred thousand dollars
($500,000).

end insert begin insert

(B) For purposes of this paragraph, “unit price” means the
amount paid for a single unit of an item of work, and “typical
work” means a work description applicable universally or
applicable to a large number of individual projects, as
distinguished from work specifically described with respect to an
individual project.

end insert