BILL ANALYSIS �
SB 975
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Date of Hearing: June 18, 2014
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
SB 975 (Lieu) - As Amended: May 27, 2014
SENATE VOTE : 23-10
SUBJECT : Personal services contracts: legal compliance
SUMMARY : Adds language to the Government Code that seeks to
increase compliance with state law and regulations concerning
personal service contracts. Specifically, this bill :
1)Requires bidders on state contracts for personal services to
pledge compliance, under penalty of perjury, that the
contractor will comply with all applicable state laws and
regulations, as specified.
2)Prevents a state agency or department from awarding a personal
services contract to a bidder with an adjudicated record of
repeated noncompliance, as specified.
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)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.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Likely minor costs to include a standard form in bid documents
for bidders to affirmatively pledge compliance with state laws
and regulations.
2)Unknown costs to the Department of General Services (DGS) and
SB 975
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state contracting agencies related to increased bid protests,
to the extent this bill provides grounds for challenges to
bids and contracts.
COMMENTS : According to the author, this bill 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 author contends DGS lacks any form of a central
tracking system and allows any past violator to apply for a
state service contract, regardless of past violations.
The Department of Finance (DOF) opposes this bill stating that
it is unnecessary to create a law to comply with the law. DOF
also notes that state agencies already review tax registries
prior to the award of a contract and, depending on the scope of
the contract, may require licensure and insurance, which state
agencies could request proof of prior to the contract award.
SUGGESTED COMMITTEE AMENDMENTS : Due to concerns with sections
of the bill that deal with a pledge of compliance and an
adjudicated record of repeated noncompliance, the author has
agreed to remove those sections (19138.1 (a) and (b)) and add
the following language:
19138.1 (a) Every personal services contract entered into
pursuant to Section 19130 shall require, under penalty of
perjury, a standard form of questionnaire inquiring whether
such contractor, has ever violated state tax law or laws
and regulations relating to health and safety, labor and
employment or licensing of the contractor's employees,
worksite, bid and contract, and if so to explain the
circumstances.
(b)A personal services contract shall not be awarded to a
bidder who does not complete the questionnaire required by
this section.
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REGISTERED SUPPORT / OPPOSITION :
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
Opposition
Department of Finance
Analysis Prepared by : William Herms / A. & A.R. / (916)
319-3600