BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 502
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     SB 502 (Block) - As Amended:  June 25, 2014 

          Policy Committee:                              
          AccountabilityVote:10-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill modifies University of California (UC) contracting  
          requirements. Specifically, this bill:

          1)Increases, from $100,000 to $640,000, the maximum project cost  
            under which UC may use a streamlined bidding process.

          2)Requires UC to establish prequalification, as specified, for  
            bidders on projects awarded pursuant to the above and costing  
            between $300,000 and $640,000.

          3)Requires campuses to post specified information regarding  
            contracts awarded per the above on its website.

           FISCAL EFFECT  

          Significant ongoing net administrative cost savings to UC from  
          expanding eligibility to apply streamlined contracting  
          procedures.

           COMMENTS  

           1)Background  . 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.  
            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.

           2)Purpose  . According to UC, which is sponsoring this bill, the  








                                                                  SB 502
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            procedure to formally bid a project takes approximately three  
            months and involves increased project manager and  
            administrative staffing costs. UC contends that changing to  
            the informal bidding process could reduce the cost of these  
            projects and allow them to be built more quickly.  The new  
            threshold of $640,000 equates to the threshold for similar  
            contracting flexibility provided to other state agencies and  
            the California State University.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081