BILL ANALYSIS �
SB 502
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Date of Hearing: June 18, 2014
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
SB 502 (Block) - As Amended: June 11, 2014
SENATE VOTE : 37-0
SUBJECT : University of California: bidding requirements
SUMMARY : Increases the threshold in which the University of
California (UC) may use a streamlined bidding process for
constructions projects. Specifically, this bill :
1)Increases the threshold from $100,000 to $750,000.
2)Sets a qualifications process for prospective bidders on
projects where costs exceed $300,000.
3)Requires the public posting of certain contract information.
EXISTING LAW allows UC to use a streamlined process for
construction projects that do not exceed $100,000 and requires a
more formal bidding process for projects that exceed this
threshold.
FISCAL EFFECT : This bill, as amended, has not yet been
analyzed by a fiscal committee.
COMMENTS : For construction projects that exceed $100,000, UC
is required to solicit written bids and follow the formal
bidding procedures specified in the Public Contract Code. Some
procedures include advertising bids and allowing 60 days for
interested bidders to submit proposals. After receiving bids,
UC can either contract with the lowest responsible bidder or
reject all bids. For contracts valued at $100,000 or less, UC
has the discretion to follow a less formal procedure. However,
the procedure still requires written bids and UC to contract
with the lowest responsible bidder or to reject all bids.
This bill is sponsored by UC to increase the threshold for the
less formal process from $100,000 to $750,000. According to UC,
the procedure to formally bid a project takes approximately
three months and involves increased project manager and
administrative staffing costs. UC explained that changing to
SB 502
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the informal bidding process could reduce the cost of these
projects and allow them to be built more quickly.
This bill also sets a qualifications process for prospective
bidders for projects that cost between $300,000 and $750,000.
This bill would require UC to establish a procedure in which
potential bidders would qualify for projects within these cost
ranges before they could bid. At a minimum, the information
sought in the qualifications application must cover issues
specified in the Department of Industrial Relations' (DIR) Model
Prequalification Questionnaire. This DIR document requests
information related to contractors' business structure,
performance and legal compliance, as well as information about
recent construction projects completed.
Opponents of this bill, which include non-union employer
associations, are concerned that the prequalification process
could allow UC to discriminate against non-union contractors.
Opponents are seeking the addition of non-discrimination
language to this bill. According to UC, such language is not
needed since UC's equal opportunities and fair business dealing
policies already provide non-discrimination protections to
contractors, including non-union ones.
In addition to changing thresholds and establishing the
prequalification process, this bill also requires UC campuses or
facilities to post on their websites information about projects
bid under the procedures set by this bill. Specifically, a
posting must include a brief description of the project, awarded
amount, and the name of the contractor.
While increasing transparency through these postings, this bill
would provide UC flexibility in completing relatively small
construction projects in a timely manner at possibly reduced
costs.
REGISTERED SUPPORT / OPPOSITION :
Support
UC (sponsor)
Associated General Contractors: California Chapters
Opposition
SB 502
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Air Conditioning Trade Association
Associated Builders and Contractors - San Diego Chapter
Plumbing-Heating-Cooling Contractors Association of California
Western Electrical Contractors Association
Analysis Prepared by : Scott Herbstman / A. & A.R. / (916)
319-3600