BILL ANALYSIS �
SB 975
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Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 975 (Lieu) - As Amended: June 25, 2014
Policy Committee:
AccountabilityVote:10-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires every bidder on a state personal services
contract to complete, under penalty of perjury, a standardized
questionnaire as to whether the bidder has ever violated state
tax law or laws and regulations related 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. The bill prohibits awarding a contract to a
bidder who does not complete the questionnaire.
FISCAL EFFECT
Costs for the Department of General Services (DGS) to develop
the standard questionnaire would be minor and absorbable. To the
extent prospective contractors elect not to compete for a state
contract rather than take the effort to complete a
questionnaire, for which they could be subject to perjury
charges, there will be less competition on state contracts,
which tends to increase contract prices. This would not likely
occur often, but given the large volume of state contracting,
additional contract costs could be significant. In addition,
depending on the information provided by prospective contractors
as required, there could be an increase in bid protests, which
would increase contract administration costs for DGS and state
contracting agencies.
COMMENTS
1) Purpose . According to the author, this bill-sponsored by
the American Federation of State, County, and Municipal
Employees-would bring transparency to the state contract
SB 975
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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.
2) Opposition . The Department of Finance (DOF) argues 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.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081