BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 975|
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UNFINISHED BUSINESS
Bill No: SB 975
Author: Lieu (D)
Amended: 6/25/14
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 7-2, 4/8/14
AYES: Correa, Cannella, De Le�n, Galgiani, Lieu, Padilla,
Torres
NOES: Berryhill, Vidak
NO VOTE RECORDED: Hernandez, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SENATE FLOOR : 23-10, 5/28/14
AYES: Beall, Block, Cannella, Corbett, Correa, De Le�n,
DeSaulnier, Evans, Galgiani, Hernandez, Hill, Hueso, Jackson,
Lara, Leno, Lieu, Mitchell, Monning, Padilla, Pavley,
Steinberg, Torres, Wolk
NOES: Anderson, Berryhill, Gaines, Huff, Knight, Morrell,
Nielsen, Vidak, Walters, Wyland
NO VOTE RECORDED: Calderon, Fuller, Hancock, Liu, Roth, Wright,
Yee
ASSEMBLY FLOOR : 56-22, 08/27/14 - See last page for vote
SUBJECT : Personal services contracts: legal compliance
SOURCE : AFSCME
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DIGEST : 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; and prohibits awarding a contract
to a bidder who does not complete the questionnaire.
Assembly Amendments delete the provision placing responsibility
on the Department of General Services (DGS) and state agencies
to require personal services contract bidders to complete
specified forms, and instead place the responsibility on bidders
to complete the forms.
ANALYSIS :
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 requires a state agency or department
to require a prospective bidder on a public works project to
answer questions inquiring whether, and if so, to explain the
circumstances under which 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.
4.Establishes standards for the use of personal services
contracts by state agencies. Provides that personal services
contracting is permissible to achieve cost savings when
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certain conditions are met.
This bill:
1.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.
2.Prohibits awarding a contract to a bidder who does not
complete the questionnaire.
Comments
The author's office states that this bill will 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's office 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, costs for
DGS to develop the standard questionnaire will 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 will
not likely occur often, but given the large volume of state
contracting, additional contract costs may be significant. In
addition, depending on the information provided by prospective
contractors as required, there may be an increase in bid
protests, which will increase contract administration costs for
DGS and state contracting agencies.
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SUPPORT : (Verified 8/27/14)
AFSCME (source)
California Labor Federation
In the Public Interest
Los Angeles Alliance for a New Economy
Working Partnerships, USA
OPPOSITION : (Verified 8/27/14)
Department of Finance
ARGUMENTS IN SUPPORT : The bill's sponsor, AFSCME, states that
the concept behind this bill 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 contractors' track records, and to receive a promise
that they will comply with the same rules expected of everyone
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.
ARGUMENTS IN OPPOSITION : The Department of Finance (DOF)
opposes this bill because 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. DOF states that DGS has cited various policy
concerns related to this bill's impact on competitive bidding
processes and the legal ramifications of violating its
provisions. DOF writes, "This bill would create a barrier for
businesses to win state personal services contracts based on an
adjudicated record of noncompliance, regardless of whether
remediation has been made. In addition, the prohibition would
penalize the bidder twice by forbidding the bidder from winning
a state personal services contract after a judge has rendered a
decision in a court of law or an administrative hearing.
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Furthermore, 'adjudicated' is not defined. It can be presumed
to mean a decision rendered in an administrative hearing or a
court of law. However, according to DGS, there are unanswered
questions over its application as it applies to this bill." DOF
states that it would be challenging and time-consuming for a
state agency to investigate a bidder's adjudicated record of
repeated noncompliance. DOF additionally states that this bill
is silent on penalties.
ASSEMBLY FLOOR : 56-22, 8/27/14
AYES: Achadjian, Alejo, Ammiano, Bloom, Bocanegra, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong,
Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Hall, Roger Hern�ndez, Holden, Jones-Sawyer, Levine,
Lowenthal, Medina, Mullin, Muratsuchi, Nazarian, Pan, Perea,
John A. P�rez, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, Atkins
NOES: Allen, Bigelow, Ch�vez, Conway, Dahle, Donnelly, Fox, Beth
Gaines, Grove, Hagman, Jones, Linder, Logue, Maienschein,
Mansoor, Melendez, Nestande, Olsen, Patterson, Wagner,
Waldron, Wilk
NO VOTE RECORDED: Harkey, Vacancy
MW:e 8/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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