BILL ANALYSIS �
Bill No: SB
975
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
SB 975 Author: Lieu
As Amended: March 17, 2014
Hearing Date: April 8, 2014
Consultant: Paul Donahue
SUBJECT
State contracting: Bidder compliance with state law;
Perjury
DESCRIPTION
Requires bidders on state contracts for services to swear
under penalty of perjury that the contractor will comply
with all applicable state laws and regulations.
Specifically, this bill :
1)Directs state agencies or the Department of General
Services (DGS) to require a bidder on a state contract
for services to complete a standard form, on which the
bidder must pledge compliance, under penalty of perjury,
with all applicable state taxes, and all laws and
regulations relating to health and safety, labor and
employment, and licensing relevant to the bidder's
employees, worksite, bid, and contract.
2)Prohibits a state agency or DGS from awarding a contract
to a bidder who does not affirmatively pledge, under
penalty of perjury, compliance with all relevant state
laws and regulations, as specified above.
3)Prohibits a state agency or DGS from awarding a contract
to a bidder with an adjudicated record of repeated
noncompliance with applicable state taxes, or with laws
SB 975 (Lieu) continued
PageB
and regulations relating to the health and safety, labor
and employment, and licensing relevant to the bidder's
employees, worksite, and bid.
EXISTING LAW
1)Requires a competitive bidding process for all contracts
entered into by any state agency for services to be
rendered to the state, whether or not the services
involve the furnishing or use of equipment, materials, or
supplies, or are performed by an independent contractor.
2)The State Contract Act<1> requires a state agency or
department to require a prospective bidder on a public
works project to answer questions inquiring whether, and
if applicable explain the circumstances, the prospective
bidder has ever been disqualified, removed, or otherwise
prevented from bidding on, or completing a federal,
state, or local government project because of a violation
of law or a safety regulation. The questionnaire must be
completed under penalty of perjury.
3)Authorizes a state agency or department to reject the bid
of a bidder who has been disqualified, removed, or
otherwise prevented from bidding on, or completing a
federal, state, or local public works project because of
a violation of law or a safety regulation.
BACKGROUND
1)Author's statement : The author states that SB 975 would
bring transparency to the state contract bidding process
by requiring prospective contractors to disclose if they
have ever violated state laws or safety regulations. The
author states that, if taxpayers are going to trust a
for-profit company to provide vital services, the company
should show it can be trusted. It is important to know
the track records of all companies with which the state
or a local agency is contracting, to ensure that only law
abiding companies receive taxpayer dollars for public
contracts. The author notes that the federal Government
Accountability Office estimates that companies that do
business with the federal government owe as much as $5
billion in federal taxes. The DGS lacks any form of a
central tracking system and allows any past violator to
-------------------------
<1> Public Contract Code � 10100 et seq.
SB 975 (Lieu) continued
PageC
apply for a state service contract, regardless of past
violations.
2)Support : The sponsor states that the concept behind SB
975 is simple: a for-profit company that receives
taxpayer dollars to ensure that state agencies can
effectively execute the law should not be a tax dodger or
a lawbreaker. The agencies seeking the services have a
right to know the track record of contractors, and to
receive a promise that they will comply with the same
rules expected of everybody else.
Supporters also note that the underlying assumption
driving state contracts for services is that the private
sector can provide the service more effectively and
efficiently at a better price. However, low bids may be
the result of contractors cutting corners by not paying
overtime, payroll taxes or maintaining safe worksites.
PRIOR/RELATED LEGISLATION
AB 906 (Pan), Chapter 744, Statutes of 2013. Prohibits the
state to enter into personal services contracts, without
regard to cost savings, until the state agency proposing to
execute the contract has notified all organizations that
represent state employees who perform the type of work to
be contracted. Requires DGS to establish a process to
certify that notification.
AB 740 (Blumenfield), Chapter 684, Statutes of 2011.
Requires a state agency to immediately discontinue a
contract that State Personnel Board (SPB) disapproves,
prohibits the state agency from circumventing or
disregarding the SPB's action by entering into another
contract for the same or similar services or to continue
the services that were the subject of the contract that was
disapproved, and requires a state agency to provide a copy
of the notice to SPB and the employee organization that
filed the contract challenge.
SB 252 (Vargas) 2011-2012 Session. Would have required a
state agency that enters into a private contract for
services to report to the Secretary of State regarding
those contracts. Would make reports on the contracts
available for public inspection. (Changed via amendments
and later held in Assembly)
SB 975 (Lieu) continued
PageD
SUPPORT:
American Federation of State, County and Municipal
Employees (sponsor)
California Labor Federation
In the Public Interest
Los Angeles Alliance for a New Economy
Working Partnerships USA
OPPOSE:
None on file
DUAL REFERRAL: Senate Public Safety Committee
FISCAL COMMITTEE: Senate Appropriations Committee
**********