AB 1185: Los Angeles Unified School District: best value procurement: pilot program.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-10-11
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.
This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable occupation means an occupation for which the Chief of the Division of Apprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Best value score means the resulting score when the school district divides the bidders price by the bidders qualification score.
(f)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(g)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(h)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(i)Labor compliance means the ability to comply with, and past conformance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(j)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(k)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
(l)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(m)Safety record shall be deemed acceptable if a contractors experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(n)School district means the Los Angeles Unified School District.
(o)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(B)As of January 1, 2017, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(C)As of January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(D)As of January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(E)As of January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(p)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(d)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the bidder with the third lowest best value score.
(e)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)(1)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(2)A best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
(3)An entitys commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
(A)The entitys agreement with the school district that the entity and its subcontractors at every tier will comply with the requirements of this subdivision and that the entity will provide the governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this subdivision, the entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement that includes the requirements of this subdivision and that will bind the entity and all its subcontractors at every tier performing the project or contract.
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighted as deemed appropriate by the school district:
(A)Relevant experience.
(B)Safety record.
(C)Other factors identified in the request for proposal.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the appropriate policy and fiscal committees of the Legislature an interim and final report on the use of the best value procurement method. The reports shall be prepared by an independent third party and the school district shall pay for the cost of the report. The reports shall be submitted to the appropriate policy and fiscal committees of the Legislature as follows:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)The requirement for submitting a report imposed pursuant to subdivision (a) is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable occupation means an occupation for which the Chief of the Division of Apprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Best value score means the resulting score when the school district divides the bidders price by the bidders qualification score.
(f)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(g)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(h)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(i)Labor compliance means the ability to comply with, and past conformance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(j)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(k)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
(l)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(m)Safety record shall be deemed acceptable if a contractors experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(n)School district means the Los Angeles Unified School District.
(o)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(B)As of January 1, 2017, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(C)As of January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(D)As of January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(E)As of January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the United States Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(p)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(d)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the bidder with the third lowest best value score.
(e)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)(1)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(2)A best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
(3)An entitys commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
(A)The entitys agreement with the school district that the entity and its subcontractors at every tier will comply with the requirements of this subdivision and that the entity will provide the governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this subdivision, the entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement that includes the requirements of this subdivision and that will bind the entity and all its subcontractors at every tier performing the project or contract.
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighted as deemed appropriate by the school district:
(A)Relevant experience.
(B)Safety record.
(C)Other factors identified in the request for proposal.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the appropriate policy and fiscal committees of the Legislature an interim and final report on the use of the best value procurement method. The reports shall be prepared by an independent third party and the school district shall pay for the cost of the report. The reports shall be submitted to the appropriate policy and fiscal committees of the Legislature as follows:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)The requirement for submitting a report imposed pursuant to subdivision (a) is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable occupation means an occupation for which the Chief of the Division of Apprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Best value score means the resulting score when the school district divides the bidders price by the bidders qualification score.
(f)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(g)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(h)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(i)Labor compliance means the ability to comply with, and past performance conformance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(j)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(k)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
(l)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(m)Safety record shall be deemed acceptable if a contractors experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, category or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(n)School district means the Los Angeles Unified School District.
(o)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal United States Secretary of Labor.
(B)As of January 1, 2017, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal United States Secretary of Labor.
(C)As of January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal United States Secretary of Labor.
(D)As of January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal United States Secretary of Labor.
(E)As of January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal United States Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(p)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(d)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the bidder with the third lowest best value score.
(e)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)(1)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(2)A best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
(3)An entitys commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
(A)The entitys agreement with the school district that the entity and its subcontractors at every tier will comply with the requirements of this subdivision and that the entity will provide the governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this subdivision, the entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement that includes the requirements of this subdivision and that will bind the entity and all its subcontractors at every tier performing the project or contract.
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighted as deemed appropriate by the school district:
(A)Relevant experience.
(B)Safety record.
(C)Other factors identified in the request for proposal.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the Legislative Analyst the following reports completed by an independent third party: appropriate policy and fiscal committees of the Legislature an interim and final report on the use of the best value procurement method. The reports shall be prepared by an independent third party and the school district shall pay for the cost of the report. The reports shall be submitted to the appropriate policy and fiscal committees of the Legislature as follows:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)The Legislative Analyst shall submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to subdivision (a) and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
(b)The requirement for submitting a report imposed pursuant to subdivision (a) is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable Occupation occupation means an occupation for which the Chief of the Division of Apprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Best value score means the resulting score when the school district divides the bidders price by the bidders qualification score.
(f)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(g)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(h)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(i)Labor compliance means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(j)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(k)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
(l)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(m)Safety record shall be deemed acceptable as determined by the school district. In its determination, the school district shall consider, but is not required to find, if a contractors safety record as acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(n)School district means the Los Angeles Unified School District.
(o)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 30 20 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(B)As of January 1, 2017, at least 40 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(C)As of January 1, 2018, at least 50 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(D)As of January 1, 2019, at least 60 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(E)As of January 1, 2020, at least 70 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(p)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(d)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the bidder with the third lowest best value score.
(e)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)(1)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(2)A best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
(3)An entitys commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
(A)The entitys agreement with the school district that the entity and its subcontractors at every tier will comply with the requirements of this subdivision and that the entity will provide the governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this subdivision, the entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement that includes the requirements of this subdivision and that will bind the entity and all its subcontractors at every tier performing the project or contract.
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighted as deemed appropriate by the school district:
(A)Relevant experience.
(B)Safety record.
(C)Other factors identified in the request for proposal.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the Legislative Analyst the following reports completed by an independent third party:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)(1)The Legislative Analyst shall submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to subdivision (a) and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
(2)The requirement for submitting a report imposed pursuant to this subdivision is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable Occupation means an occupation for which the Chief of the Division of Aprenticeship Apprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Best value score means the resulting score when the school district divides the bidders price by the bidders qualification score.
(f)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(g)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(h)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(i)Labor compliance means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(j)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(k)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
(l)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(m)Safety record shall be deemed acceptable as determined by the school district. In its determination, the school district shall consider, but is not required to find, a contractors safety record as acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(n)School district means the Los Angeles Unified School District.
(o)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(B)As of January 1, 2017, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(C)As of January 1, 2018, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(D)As of January 1, 2019, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(E)As of January 1, 2020, at least 70 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(p)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(d)
(c)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(e)
(d)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the bidder with the third lowest best value score.
(e)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)(1)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(2)A best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
(3)An entitys commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
(A)The entitys agreement with the school district that the entity and its subcontractors at every tier will comply with the requirements of this subdivision and that the entity will provide the director governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this subdivision, the entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement that includes the requirements of this subdivision and that will bind the entity and all its subcontractors at every tier performing the project or contract.
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighted as deemed appropriate by the school district:
(A)Relevant experience.
(B)Safety record.
(C)Other factors identified in the request for proposal.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the Legislative Analyst the following reports completed by an independent third party:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)(1)The Legislative Analyst shall submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to subdivision (a) and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
(2)The requirement for submitting a report imposed pursuant to this subdivision is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable Occupation means an occupation for which the Chief of the Division of Aprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Best value score means the resulting score when the school district divides the bidders price by the bidders qualification score.
(e)
(f)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(f)
(g)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(g)
(h)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(h)
(i)Labor compliance means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(i)
(j)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(j)
(k)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, skilled and trained workforce, the safety record of the bidder, and, if required by the bidding document, some or all of to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
(k)
(l)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(l)
(m)Safety record shall be deemed acceptable as determined by the school district. In its determination, the school district shall consider, but is not required to find, a contractors safety record as acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(m)
(n)School district means the Los Angeles Unified School District.
(n)
(o)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 20 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(B)As of January 1, 2017, at least 30 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(C)As of January 1, 2018, at least 40 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(D)As of January 1, 2019, at least 50 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(E)As of January 1, 2020, at least 60 70 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(o)
(p)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(d)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(e)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the second lowest scored bidder that represents the best value. bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the bidder with the third lowest scored bidder. best value score.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)(1)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(2)A best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
(3)An entitys commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
(A)The entitys agreement with the school district that the entity and its subcontractors at every tier will comply with the requirements of this subdivision and that the entity will provide the director with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this subdivision, the entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement that includes the requirements of this subdivision and that will bind the entity and all its subcontractors at every tier performing the project or contract.
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Factors in determining a qualification score shall include, but are not limited to, relevant experience, skilled and trained workforce, and acceptable safety record and shall be weighted in accordance with the following:
(A)At least 50 percent of the total weight or consideration shall be given to the following factors: relevant expertise, skilled and trained workforce, and acceptable safety record. A factor listed in this subparagraph shall not make up less than 15 percent of the total weight or consideration. Other factors may be included, in addition to relevant experience, skilled and trained workforce, and acceptable safety record, in determining a qualification score.
(B)No more than 50 percent of the total weight or consideration shall be given to price. A bidder that qualifies as a certified small business shall receive a 5-percent bid preference.
(2)Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighted as deemed appropriate by the school district:
(A)Relevant experience.
(B)Safety record.
(C)Other factors identified in the request for proposal.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the Legislative Analyst the following reports completed by an independent third party:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)(1)The Legislative Analyst shall submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to subdivision (a) and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
(2)The requirement for submitting a report imposed pursuant to this subdivision is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
(a)It is the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. The Legislature has recognized the merits of the best value procurement method process in the past by authorizing its use for projects undertaken by the University of California.
(b)The Legislature also finds and declares that school districts using the best value procurement method require a clear understanding of the roles and responsibilities of each participant in the best value process. As reflected in the University of California report to the Legislature, the benefits of a best value procurement method include a reduction in contract delays, change orders, and claims producing a savings in both contract costs and administration.
(c)It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building school construction projects.
20119.1.As used in this article:
(a)Apprenticeable Occupation means an occupation for which the Chief of the Division of Aprenticeship Standards had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
(b)Best value means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(c)Best value contract means a competitively bid contract entered into pursuant to this article.
(d)Best value contractor means a properly licensed person, firm, or corporation that submits a bid for and is awarded a best value contract.
(e)Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(f)Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds and required insurance.
(g)Governing board or governing board of the school district means the governing board of the Los Angeles Unified School District.
(h)Labor compliance means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(i)Project has the same meaning as public project as defined in subdivision (c) of Section 22002.
(j)Qualifications means financial condition, relevant experience, demonstrated management competency, labor compliance, skilled and trained workforce, the safety record of the bidder, and, if required by the bidding document, some or all of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work.
(k)Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(l)Safety record shall be deemed acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(m)School district means the Los Angeles Unified School District.
(n)Skilled and trained workforce means a workforce that meets all of the following conditions:
(1)All the workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
(2)(A)As of January 1, 2016, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(B)As of January 1, 2017, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(C)As of January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(D)As of January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(E)As of January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was either approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(3)For an apprenticeable occupation in which no apprenticeship program had been approved by the chief prior to January 1, 1995, up to one-half of the graduation percentage requirements of paragraph (2) may be satisfied by skilled journeypersons who commenced working in the apprenticeable occupation prior to the chiefs approval of an apprenticeship program for that occupation in the county in which the project is located.
(o)Skilled journeyperson means a worker who either:
(1)Graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor.
(2)Has at least as many hours of on-the-job experience in the applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
20119.2.(a)This article provides for a pilot program for the Los Angeles Unified School District to use best value procurement for projects over one million dollars ($1,000,000).
(b)The governing board, for projects over one million dollars ($1,000,000), before December 31, 2020, may use the best value procurement method in accordance with this article.
(c)The governing board of the school district shall let any contract for a project pursuant to this article to the selected bidder that represents the best value or else reject all bids.
(d)The bidder may be selected on the basis of the best value to the governing board of the school district. In order to implement this method of selection, the governing board of the school district shall adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. These procedures and guidelines shall conform to this article and shall be mandatory for the school district when using best value selection.
(e)If the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the second lowest scored bidder that represents the best value. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the third lowest scored bidder.
(f)(1)If the school district elects to award a project pursuant to this section, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
(2)In a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
(g)All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protection contained in Chapter 4 (commencing with Section 4100) of Part 1.
20119.3.The governing board of the school district shall proceed in accordance with the following when awarding best value contracts under this article:
(a)The school district shall prepare a solicitation for bids and give notice pursuant to Section 20112.
(b)The school district shall establish a procedure to prequalify bidders as required by this code. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(c)Each solicitation for bids shall do all of the following:
(1)Invite prequalified bidders to submit sealed bids in the manner prescribed by this article.
(2)Include a section identifying and describing the following:
(A)Criteria that the school district will consider in evaluating the qualifications of the bidders.
(B)The methodology and rating or weighting system that will be used by the school district in evaluating bids.
(C)The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
(d)Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
20119.4.Selection of the best value contractor shall be made as follows:
(a)(1)The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
(2)Factors in determining a qualification score shall include, but are not limited to, relevant experience, skilled and trained workforce, and acceptable safety record and shall be weighted in accordance with the following:
(A)At least 50 percent of the total weight or consideration shall be given to the following factors: relevant expertise, skilled and trained workforce, and acceptable safety record. A factor listed in this subparagraph shall not make up less than 15 percent of the total weight or consideration. Other factors may be included, in addition to relevant experience, skilled and trained workforce, and acceptable safety record, in determining a qualification score.
(B)No more than 50 percent of the total weight or consideration shall be given to price. A bidder that qualifies as a certified small business shall receive a 5-percent bid preference.
(b)To determine the best value contractor, the school district shall divide each bidders price by its qualifications score. A preference of up to 5 percent shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidders price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
(c)The school district shall issue a written decision of its contract award or else reject all bids.
(d)Upon issuance of a contract award, the school district shall publicly announce its award identifying the project, the project price, the best value contractor to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
20119.5.(a)(1)A school district that uses the best value procurement method pursuant to this article shall submit to the Legislative Analyst the following reports completed by an independent third party:
(A)An interim report on or before July 1, 2018.
(B)A final report on or before January 1, 2020.
(2)A report shall include, but is not limited to, the following information:
(A)A description of the projects awarded using the best value procedures.
(B)The contract award amounts.
(C)The best value contractors awarded the projects.
(D)A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
(E)A description of the prequalification process.
(F)The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
(G)If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
(b)(1)The Legislative Analyst shall submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to subdivision (a) and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
(2)The requirement for submitting a report imposed pursuant to this subdivision is inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.
20119.6.Except as otherwise provided in this article, the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
20119.7.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the Los Angeles Unified School District to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
|
Date
|
Status
|
|---|---|
| Jun 17, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 2.) (June 17). Re-referred to Com. on APPR. |
| Oct 11, 2015 | Chaptered by Secretary of State - Chapter 786, Statutes of 2015. |
| Oct 11, 2015 | Approved by the Governor. |
| Sep 16, 2015 | Enrolled and presented to the Governor at 4 p.m. |
| Sep 3, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 53. Noes 25.). |
| Sep 3, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 53. Noes 25. Page 2833.). |
| Sep 1, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 26. Noes 14. Page 2374.). |
| Sep 1, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Sep 1, 2015 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 3 pursuant to Assembly Rule 77. |
| Aug 31, 2015 | Read second time and amended. Ordered to third reading. |
| Aug 27, 2015 | From committee: Amend, and do pass as amended. (Ayes 5. Noes 2.) (August 27). |
| Jul 6, 2015 | In committee: Referred to APPR. suspense file. |
| Jul 1, 2015 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Jun 23, 2015 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Feb 27, 2015 | Introduced. To print. |
| Jun 4, 2015 | Referred to Coms. on ED. and APPR. |
| May 22, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 48. Noes 23. Page 1556.) |
| May 22, 2015 | Read third time. Passed. Ordered to the Senate. |
| May 22, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 21, 2015 | Read second time. Ordered to third reading. |
| May 20, 2015 | Read second time and amended. Ordered returned to second reading. |
| May 19, 2015 | From committee: Amend, and do pass as amended. (Ayes 5. Noes 2.) (May 13). |
| May 7, 2015 | Re-referred to Com. on ED. |
| May 6, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on ED. Read second time and amended. |
| Mar 23, 2015 | Referred to Com. on ED. |
| Mar 2, 2015 | Read first time. |
| Mar 1, 2015 | From printer. May be heard in committee March 31. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 3, 2015 | AB 1185 RIDLEY-THOMAS Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 1, 2015 | Assembly 3rd Reading AB1185 Ridley-Thomas By Mendoza | Senate Floor |
Passed |
|
| Aug 27, 2015 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| Jul 6, 2015 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jun 17, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Education |
Passed |
|
| May 22, 2015 | AB 1185 RIDLEY-THOMAS Assembly Third Reading | Assembly Floor |
Passed |
|
| May 13, 2015 | Do pass as amended. | Assembly Standing Committee on Education |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Air Conditioning Trade Association | * Against | Jun 17, 2015 |
| Associated Builders And Contractors Of California | * Indeterminate | Jul 6, 2015 |
| Los Angeles Unified School District | * Support | Jun 17, 2015 |
| Plumbing-Heating-Colling Contractors Association of California | ** Against | Jun 17, 2015 |
| State Building & Construction Trades Council Of California | * Indeterminate | Jul 6, 2015 |
| The Plumbing, Heating, Cooling Contractors of California | * Against | Jun 17, 2015 |
| u Air Conditioning Trade Association | * Against | Jun 17, 2015 |
| Western Electrical Contractors Association | * Against | Jun 17, 2015 |
| Western Electrical Contractors Association (Weca-Iec) | * Against | Jun 17, 2015 |
AB 1185
Page 8
CONCURRENCE IN SENATE AMENDMENTS
AB 1185
(Ridley-Thomas)
As Amended August 31, 2015
Majority vote
ASSEMBLY: |
48-23 |
(May 22, 2015) |
SENATE: |
26-14 |
(September 1, 2015) |
Original Committee Reference: ED.
SUMMARY: Authorizes the Los Angeles Unified School District (LAUSD) to utilize a best value procurement process as a pilot project until January 1, 2021, for construction projects over $1 million. Specifically, this bill:
Expresses the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. Finds and declares that the Legislature has recognized the merits of best value procurement through its authorization of the method by the University of California (UC). Through UC's report, best value procurement method has been found to reduce contract delays, change orders, and claims, thereby producing savings in both contract costs and administration.
Establishes the following definitions:
"Apprenticeable occupation" means an occupation for which the Chief of the Division of Apprenticeship Standards (DAS) had approved an apprenticeship program pursuant to Labor Code Section 3075 prior to January 1, 2015.
"Best value" means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
"Best value contract" means a contract entered into pursuant to this bill.
"Best value contractor" means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.
"Best Value Score" means the resulting score when the school district divides the bidder's price by the bidder's qualification score.
"Demonstrated management competency" means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
"Financial condition" means the financial resources needed to perform the contract. The criteria used to evaluate a bidder's financial condition shall include, at a minimum, capacity to obtain all required payment bonds, and required insurance.
"Governing board" or "governing board of the school district" means the governing board of the LAUSD.
"Labor compliance" means the ability to comply with, and past conformance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidder's labor compliance shall include, at a minimum, the bidder's ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
"Project" has the same meaning as "public project" is defined in Public Contract Code (PCC) Section 22002(c).
"Qualifications" means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
"Relevant experience" means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
"Safety record" shall be deemed "acceptable" if a contractor's experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Labor Code Section 3201.5.
"School district" means the LAUSD.
"Skilled and trained workforce" means a workforce that meets of the following conditions:
All workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the DAS; and,
Individuals employed to perform work on the contract or project are comprised of skilled journeypersons and subcontractors at every tier that are graduates of an apprenticeship program approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor, meeting the specified percentages and timeline:
At least 20% by January 1, 2016.
At least 30% by January 1, 2017.
At least 40% by January 1, 2018.
At least 50% by January 1, 2019.
At least 60% by January 1, 2020.
Specifies that for an apprenticeable occupation in which no apprenticeship program had been approved by the Chief of DAS before January 1, 1995, up to one-half of the graduation percentage requirements may be satisfied by skilled journeypersons who commenced working in the apprenticable occupation prior to the chief's approval of an apprenticeship program for that occupation in the county in which the project is located.
"Skilled journeyperson" means a worker who either: (1) graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to apprenticeship regulations adopted by the Secretary of Labor, or (2) has at least as many hours of on-the-job experience in an applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
Specifies that the bidder may be selected on the basis of the best value to the governing board of the school district. Requires the governing board of the school district to adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. Requires the procedures and guidelines to conform to this bill and to be mandatory for the school district when using best value selection.
Specifies that if the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the third lowest best value score.
Specifies that the governing board of the school district shall let any contract for a project pursuant to this bill to the selected bidder that represents the best value or else reject all bids.
Specifies that if the school district elects to award a project pursuant to this bill, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5% if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
Specifies that in a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
Provides that all subcontractors that are identified in the proposal shall be afforded protections under the Subletting and Subcontracting Fair Practices Act.
Requires the governing board of a school district to use the following procedure when awarding best value contracts:
The governing board of the school district shall prepare a solicitation for bids and give notice pursuant to PCC Section 20112.
The governing board of the school district shall establish a procedure to prequalify bidders. Specifies that information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act.
Specifies that a best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
Provides that an entity's commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
The entity's agreement with the governing board of the school district that the entity and its subcontractors at every tier will comply with the requirements specified in this bill and that the entity will provide the governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this bill.
If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this bill, the entity's agreement that it will become a party to that project labor agreement.
Evidence that the entity has entered into a project labor agreement that includes the requirements of this bill and that will bind the entity and all its subcontractors at every tier performing the project or contract.
Each solicitation for bids shall do all of the following:
Invite prequalified bidders to submit sealed bids in the manner prescribed by this bill.
Include a section identifying and describing the following:
Criteria that the governing board of the school district will consider in evaluating the qualifications of the bidders.
The methodology and rating or weighting system that will be used by the governing board of the school district in evaluating bids and specifically whether proposals will be rated according to numeric or qualitative values.
The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
Requires the selection of the best value contractor to be made as follows:
The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighed as deemed appropriate by the school districts:
Relevant experience.
Safety record.
Other factors identified in the request for proposal.
To determine the best value contractor, the governing board of the school district shall divide each bidder's price by its qualifications score. A preference of up to 5% shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidder’s price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
The governing board of the school district shall issue a written decision of its contract award or else reject all bids.
Upon issuance of a contract award, the governing board of the school district shall publicly announce its award identifying the project, the project price, and the best value contractor, to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
Requires a school district that uses the best value procurement method pursuant to this bill to submit to the appropriate policy and fiscal committees of the Legislature an interim and final report completed by an independent third party and paid for by the school district, as follows:
An interim report on or before July 1, 2018.
A final report on or before January 1, 2020.
A report shall include, but is not limited to, the following information:
A description of the projects awarded using the best value procedures.
The contract award amounts.
The best value contractors awarded the projects.
A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
A description of the prequalification process.
The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
Specifies that the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
Sunsets on January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
Finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of California Constitution Section 16, Article IV because of the need to establish a pilot project for the LAUSD to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
The Senate amendments:
Remove, in the definition of "safety record" the authority of the school district to determine what is "acceptable" and instead specify that "safety record" is deemed "acceptable" based on a contractor's experience modification rate, as specified.
Modify the definition of "skilled and trained workforce" by reducing, by ten percent at each target date, the percentage of skilled journeyperson employed to perform work on the contract or project who must be graduates of an apprenticeship program.
Strike the requirements for the LAUSD to submit an interim and final report to the Legislative Analyst's Office (LAO) and for the LAO to submit an interim and final report to the Legislature, and instead require the LAUSD to pay for an interim and final report completed by an independent third party and submit the reports to appropriate policy and fiscal committees of the Legislature.
FISCAL EFFECT: According to the Senate Appropriations Committee, unknown, but potentially significant savings at the district level to the extent that a) the district elects to use a best value procurement method, and b) that the method realizes savings that would surpass potential increases in costs from not choosing the lowest bidder. This bill is permissive, and would also allow LAUSD to continue to choose the lowest responsible bidder.
COMMENTS: Background. Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Under the traditional method for school facility construction, a school district would first hire an architect to design a school facility and then issue a bid for the construction phase, awarding the contract to the lowest bidder. This process is commonly called "design-bid-build".
UC Best Value Pilot Program. This bill is based on SB 667 (Migden), Chapter 367, Statutes of 2006, which established a best value pilot program for the UC. Initially authorized for five years, SB 667 allowed the UC San Francisco to award contracts based on the best value for the university. Under this process, UC prequalifies bidders, then evaluates the bid based on answers to a separate best value questionnaire and assigns a qualification score. UC then divides each bidder's price by its qualification score. The lowest resulting cost per quality point represents the best value bid.
In a report to the Legislature in January 2010, the UC reported that 23 contracts totaling $158.3 million were issued under the best value pilot program. Of the 23 contracts, 12 contracts were low bid contracts. According to the report, the "University Representatives for all these projects [four completed and two almost completed projects] have been unanimous in their praise of this process that has already demonstrated numerous advantages such as decreased bid protests and communication problems, decreased the need for multiple inspections and re-work, decreased disputes, change order requests, claims and litigation and increased incentives for contractors to perform their work safety and to adhere to high labor and quality standards." UC concludes that the best value pilot program fosters better quality work, less labor and safety problems, better qualified persons/contractors, better on-time completion, and better on-budget performance. In 2011, SB 835 (Wolk), Chapter 636, Statutes of 2011, expanded the authority to all UC campuses and extended the sunset from January 1, 2012, to January 1, 2017.
What does this bill do? This bill establishes a best value procurement process as a pilot project for LAUSD, in addition to awarding contracts through the traditional design-bid-build process. "Best value" is defined as a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications. The authority applies to projects over $1 million and will enable LAUSD to consider other factors, in addition to cost, in awarding construction contracts.
Guidelines. This bill requires LAUSD to adopt procedures and required guidelines for evaluating the qualifications of bidders to ensure that the process is fair and impartial. A prequalification process based on a questionnaire and a rating scale is required, although LAUSD already uses a prequalification process. The solicitation for bids will invite prequalified bidders to submit sealed bids. The solicitation for bids must also include information on how the school district will be evaluating the qualification of bidders, including the criteria that will be used, the methodology and the rating or weighting system that will be used, and the weight that will be assigned to the criteria for evaluation.
Qualification score. Similar to UC's best value pilot program, this bill requires the LAUSD to evaluate the qualification of the bidders solely upon the criteria specified in the solicitation documents and assign a qualification score to each bid. A bidder's price is divided by the qualification score received by the bidder. The bidder with the lowest cost per quality point represents the best value bid. The factors required to be used by this bill are slightly different than the factors used in the UC pilot program. The factors used by the UC included the bidder's financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record. This bill specifies the use of relevant experience, safety record, and other factors identified in the request for proposal in determining the qualification score. Relevant experience and safety record are factors commonly used in the questionnaire for prequalification. According to the sponsor, the LAUSD, whereas the prequalification questionnaire may determine minimum qualifications, the information solicited through the best value procurement method will enable a school district to evaluate a bidder's qualification and background based on more specific needs of a project.
Prior legislation. This bill was introduced last session as AB 1971 (Bocanegra) of 2014. The author held AB 1971 on the Senate floor. This bill modifies AB 1971 by deleting the specified weight that must be given to relevant expertise, skilled and trained workforce and acceptable safety record. This bill, instead, makes the use of a "skilled and trained" workforce as a requirement for participation rather than a factor in determining best value, and leaves the weight of the factors unspecified. "Skilled and trained workforce" is defined as a workforce where all of the workers working on the project are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of DAS under the Division of Industrial Relations.
Arguments in support. The author states, "With billions of dollars in state and local funds being spent on school construction projects throughout the state it is imperative that school districts have the necessary tools to reduce risk and maximize efficiencies. The best value procurement process would create transparent and objective criteria that will result in the selection of a quality contractor and a good history at a competitive price."
Arguments in opposition. The Associated Builders and Contractors of California (ABC California) states that this bill "will make it even more difficult for non-union contractors to participate in the best value pilot program proposed for the Los Angeles Unified School District (LAUSD)." ABC California further states, "The 'skilled workforce' requirement is proposed by building trade unions as a new way to block local, non-union, minority and women-owned construction employers and their employees from participation in the LAUSD best value contracting process."
Analysis Prepared by: Sophia Kwong Kim / ED. / (916) 319-2087 FN: 0001845
AB 1185
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1185
Amended: 8/31/15 in Senate
SENATE EDUCATION COMMITTEE: 6-2, 6/17/15
AYES: Liu, Block, Hancock, Leyva, Monning, Pan
NOES: Runner, Vidak
NO VOTE RECORDED: Mendoza
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 48-23, 5/22/15 - See last page for vote
SUBJECT: Los Angeles Unified School District: best value procurement: pilot program
DIGEST: This bill establishes a pilot program to authorize the
Los Angeles Unified School District (LAUSD) to use a best value
procurement method, before December 31, 2020, for public projects
that exceed $1 million, and requires submission of specified reports
on the use of this procurement method.
Existing law:
Requires the governing board of a school district, to competitively bid, and award to the lowest responsible bidder, any contract for a public project (as defined) involving an expenditure of $15,000 or more. (Public Contract Code § 20111)
Authorizes, until January 1, 2017, a pilot program at the University of California (UC) to award construction contracts on a "best value" basis, rather than just to the lowest bid. (Public Contract Code §10506.4)
Defines "best value," for purposes of the UC, as a procurement process whereby the lowest responsible bidder may be selected on the basis of objective criteria with the resulting selection representing the best combination of price and qualifications. (Public Contract Code § 10506.5)
This bill:
Authorizes the governing board of the LAUSD, before December 31, 2020, to use best value procurement for projects over $1 million.
Outlines the definitions, policies, and procedures to be followed by the LAUSD consistent with current law provisions applicable to best value contracting by the UC (Public Contract Code, Chapter 2.1, Article 1.5, commencing with § 10506.4) and additionally requires that:
Specified “skilled and trained workforce” requirements are met.
Specified proceeds retention and surety bond conditions are met.
Subcontracting fair practices are followed.
LAUSD weigh, at minimum and as deemed appropriate, factors such as relevant experience, acceptable safety record and other factors identified in a request for proposal in determining qualification scores for each bid, and specifically assign preference of up to 5% to small businesses, as defined by the LAUSD.
Establishes the following additional definitions for purposes of the pilot:
“Best value score” as the resulting score when the bidder’s price is divided by the bidder’s qualification score.
“Skilled journeyperson” as a worker who either graduated from an applicable apprenticeship program which met specified state or federal approval requirements, or had at least as many hours of on-the-job experience in an applicable occupation as would be required for graduation from a state-approved apprenticeship program.
“Apprenticeable occupation” as an occupation for which the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations had approved an apprenticeship program before January 1, 2015.
“Skilled and trained workforce” as a workforce in which all the workers are skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations and establishes the following phased-in implementation of the proportion of skilled journeypersons and subcontractors at every tier, employed that must be approved apprenticeship program graduates to meet the condition of having a “skilled and trained workforce”:
At least 30% by January 1, 2016.
At least 40% by January 1, 2017.
At least 50% by January 1, 2018.
At least 60% by January 1, 2019.
At least 70% by January 1, 2020.
Provides that, for an apprenticeable occupation with no approved program prior to January 1, 1995, up to one-half of the apprenticeship program graduate percentage requirements may be met by skilled journeypersons who commenced work in the occupation prior to the approval of an applicable apprentice program in the county of the project’s location.
Prohibits the prequalification or shortlisting of a best value entity absent an enforceable commitment to use a skilled and trained workforce for all work on the project/contract as applicable and provides that this commitment may be established by:
An agreement between the entity and the school district governing board to comply with these requirements and the provision of monthly evidence demonstrating such compliance during the performance of the project/contract.
A project labor agreement (PLA), entered into by the school district governing board, that includes these requirements and that binds all contractors/subcontractors working on the project/contract and agreement by the entity to become a party to the PLA.
Evidence that the entity has entered into a PLA that includes these requirements and that binds the entity and all its subcontractors at every tier performing the project/contract.
Clarifies that the best value procurement method is not intended to change guideline, criterion, procedure, or requirement of the governing board to let a project contract to the lowest responsible bidder other than those specifically provided for in the bill’s provisions.
Requires a school district that uses the best value procurement method to submit an interim and final report, prepared by an independent third party, on its use, to be delivered to the appropriate policy and fiscal committees of the Legislature, as specified.
Sunsets these provisions on January 1, 2021.
Comments
Need for the bill. According to the author, this bill will empower LAUSD to consider qualifications other than just price. The current lowest bidder process restricts the ability of school districts to evaluate bidders on the basis of prior school construction experience, previous violations of health and safety laws, disqualification or removal from prior school construction jobs, and financial stability. This bill can ensure that the district can consider the bidder's experience or knowledge to navigate the school construction process when selecting a contractor, minimizing project delays and cost overruns.
Best Value Pilot Program. SB 667 (Migden, Chapter 367, Statutes of 2006) established a pilot program for the University of California (UC). Initially authorized for five years, the bill allowed the UC San Francisco to award contracts based on the best value for the university. Under this process, UC prequalifies bidders, then evaluates the bid based on answers to a separate best value questionnaire and assigns a qualification score. UC then divides each bidder's price by its qualification score. The lowest resulting cost per quality point represents the best value bid.
In a report to the Legislature in January 2010, the UC reported that 23 contracts totaling $158.3 million were issued under the best value pilot program. Of the 23 contracts, 12 contracts were low bid contracts. According to the report, the "University Representatives for all these projects [four completed and two almost completed projects] have been unanimous in their praise of this process that has already demonstrated numerous advantages such as decreased bid protests and communication problems, decreased the need for multiple inspections and re-work, decreased disputes, change order requests, claims and litigation and increased incentives for contractors to perform their work safety and to adhere to high labor and quality standards." UC concludes that the best value pilot program fosters better quality work, less labor and safety problems, better qualified persons/contractors, better on-time completion, and better on-budget performance. In 2011, SB 835 (Wolk, Chapter 636, Statutes of 2011), expanded the authority to all UC campuses and extended the sunset from January 1, 2012, to January 1, 2017.
The provisions of this bill are generally based upon the pilot program authorized for the UC, but codify more prescriptive requirements around labor, contractors and subcontractors, and the weighting of certain factors in the evaluation of bids.
Skilled workforce provisions. The provisions of this bill relative to a skilled workforce are very similar to recently adopted provisions regarding the use of a design-build method for awarding public works contracts by state and local agencies (SB 785, Chapter 931, Statutes of 2014), as well as contracts for the construction, alteration, demolition, installation, repair, or maintenance work at petroleum refineries (SB 54, Chapter 795, Statutes of 2013). In addition, these provisions were a component of SB 566 (O’Donnell), which was heard and passed by the Senate Education Committee on June 10, 2015, by a vote of 6-2.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
According to the Senate Appropriations Committee, there are unknown, but potentially significant savings at the district level to the extent that (1) the district elects to use a best value procurement method, and (2) that the method realizes savings that would surpass potential increases in costs from not choosing the lowest bidder. This bill is permissive, and would also allow LAUSD to continue to choose the lowest responsible bidder.
None received
OPPOSITION: (Verified 8/28/15)
None received
ASSEMBLY FLOOR: 48-23, 5/22/15
AYES: Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Eduardo Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wilk, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte, Patterson, Steinorth, Wagner
NO VOTE RECORDED: Alejo, Brough, Cristina Garcia, Gipson, Linder, O'Donnell, Olsen, Waldron, Weber
Prepared by: Kathleen Chavira / ED. / (916) 651-4105
8/30/15 19:06:25
**** END ****
AB 1185 (Ridley-Thomas) Page 0 of 1
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1185 (Ridley-Thomas) - Los Angeles Unified School District: best value procurement: pilot program.
|
|
Version: July 1, 2015 |
Policy Vote: ED. 6 - 2 |
Urgency: No |
Mandate: No |
Hearing Date: August 27, 2015 |
Consultant: Jillian Kissee |
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on August 27, 2015
Bill Summary:
This bill, an urgency measure, authorizes a pilot program for the Los Angeles Unified School District (LAUSD) to use best value procurement for projects over $1 million.
Fiscal Impact:
Unknown, but potentially significant savings at the district level to the extent that (1) the district elects to use a best value procurement method, and (2) that the method realizes savings that would surpass potential increases in costs from not choosing the lowest bidder. This bill is permissive, and would also allow LAUSD to continue to choose the lowest responsible bidder.
Author Amendments:
Removes the Legislative Analyst’s Office from the reporting requirement and shifts the responsibility to an independent third part paid for by LAUSD. Provides other technical changes.
-- END --
AB 1185 (Ridley-Thomas) Page 3 of 3
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1185 (Ridley-Thomas) - Los Angeles Unified School District: best value procurement: pilot program.
|
|
Version: May 20, 2015 |
Policy Vote: ED. 6 - 2 |
Urgency: No |
Mandate: No |
Hearing Date: July 6, 2015 |
Consultant: Jillian Kissee |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
This bill, an urgency measure, authorizes a pilot program for the Los Angeles Unified School District (LAUSD) to use best value procurement for projects over $1 million and requires the Legislative Analyst Office (LAO) to report on the use of the best value procurement method by school districts.
Fiscal Impact:
LAUSD: Unknown, but potentially significant costs and/or savings at the district level to the extent that (1) the district elects to use a best value procurement method, and (2) that the method actually realizes savings that would surpass potential increases in costs from not choosing the lowest bidder. This bill is permissive, and would also allow LAUSD to continue to choose the lowest responsible bidder.
LAO indicates costs of approximately $75,000 General Fund related to the interim and final reporting requirement.
Background:
Existing law requires the governing board of a school district, to competitively bid, and award to the lowest responsible bidder, any contract for a public project (as defined) involving an expenditure of $15,000 or more. (Public Contract Code § 20111)
Existing law, until January 1, 2017 authorizes a pilot program at the University of California (UC) to award construction contracts on a "best value" basis, rather than just to the lowest bid. (Public Contract Code §10506.4)
Existing law defines "best value," for purposes of the UC, as a procurement process whereby the lowest responsible bidder may be selected on the basis of objective criteria with the resulting selection representing the best combination of price and qualifications. (Public Contract Code § 10506.5)
Proposed Law:
This bill, an urgency measure, authorizes a pilot program for the Los Angeles Unified School District (LAUSD) to use best value procurement for projects over $1 million before December 31, 2020 and requires the Legislative Analyst’s Office (LAO) to report on the use of the best value procurement method by school districts. This bill’s provisions are only in effect until January 1, 2021.
Specifically,
this bill:
Authorizes that a bidder may be selected on the basis of best value to the governing board.
Generally outlines the definitions, policies, and procedures to be followed by LAUSD consistent with current law provisions applicable to best value contracting by the UC (Public Contract Code, Chapter 2.1, Article 1.5, commencing with § 10506.4) and additionally requires that:
Specified “skilled and trained workforce” requirements are met.
Specified proceeds retention and surety bond conditions are met.
Subcontracting fair practices are followed.
Los Angeles Unified School District (LAUSD) weigh, at minimum and as deemed appropriate, factors such as relevant experience, acceptable safety record and other factors identified in a request for proposal in determining qualification scores for each bid, and specifically assign preference of up to 5% to small businesses, as defined by the LAUSD.
Consistent with the UC pilot, this bill requires LAUSD to establish a procedure to prequalify bidders, as specified. However, it prohibits a best value entity from being prequalified unless the entity provides an enforceable commitment that it will use a skilled and trained workforce to perform all work on the project. This commitment may be established in the following three ways:
An agreement between the entity and the school district governing board to comply with these requirements and the provision of monthly evidence demonstrating such compliance during the performance of the project/contract.
A project labor agreement (PLA), entered into by the school district governing board, that includes these requirements and that binds all contractors/subcontractors working on the project/contract and agreement by the entity to become a party to the PLA.
Evidence that the entity has entered into a PLA that includes these requirements and that binds the entity and all its subcontractors at every tier performing the project/contract.
Establishes the following definitions:
“Best value score” as the resulting score when the bidder’s price is divided by the bidder’s qualification score.
“Skilled journeyperson” as a worker who either graduated from an applicable apprenticeship program which met specified state or federal approval requirements, or had at least as many hours of on-the-job experience in an applicable occupation as would be required for graduation from a state-approved apprenticeship program.
“Apprenticeable occupation” as an occupation for which the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations had approved an apprenticeship program before January 1, 2015.
“Skilled and trained workforce” as a workforce in which all the workers are skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations and establishes the following phased-in implementation of the proportion of skilled journeypersons and subcontractors at every tier, employed that must be approved apprenticeship program graduates to meet the condition of having a “skilled and trained workforce”:
At least 20% by January 1, 2016.
At least 30% by January 1, 2017.
At least 40% by January 1, 2018.
At least 50% by January 1, 2019.
At least 60% by January 1, 2020.
This bill also establishes the following reporting requirements:
LAUSD to submit an interim report and a final report, completed by an independent third party, containing specified information on the use of best value to the LAO by July 1, 2018 and January 1, 2020, respectively.
LAO to submit an interim report to the Legislature on the use of the best value procurement method by school district by January 1, 2019 and a final report by July 1, 2020 to evaluate whether the best value procurement method should be continued, expanded, or prohibited.
Related Legislation:
This bill is almost identical to AB 1971 (Bocanegra, 2014) which was never acted upon on the Senate Floor.
Staff Comments:
This bill gives the governing board of the LAUSD the authority to use best value procurement on projects above $1 million, but does not require the district to do so. To the extent this bill results in the LAUSD awarding contracts to bidders other than those with the lowest bid, contracted costs could increase. Savings attributed to higher quality construction, reduction in contract delays, and fewer change orders and claims are speculative and it is unclear whether potential savings would offset any increases in contracts.
-- END --
AB 1185 (Ridley-Thomas) Page 5 of 5
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 1185
Author: |
Ridley-Thomas |
||
Version: |
May 20, 2015 Hearing Date: June 17, 2015 |
||
Urgency: |
No |
Fiscal: |
No |
Consultant: |
Kathleen Chavira |
||
Subject: Los Angeles Unified School District: best value procurement: pilot program
NOTE: This bill has been referred to the Committee on Education and the Committee on Appropriations. A "do pass" motion should include referral to the Committee on Appropriations.
SUMMARY
This bill, establishes a pilot program to authorize the Los Angeles Unified School District (LAUSD) to use a best value procurement method, before December 31, 2020, for public projects that exceed $1 million, and requires submission of specified reports on the use of this procurement method.
BACKGROUND
Existing law requires the governing board of a school district, to competitively bid, and award to the lowest responsible bidder, any contract for a public project (as defined) involving an expenditure of $15,000 or more. (Public Contract Code § 20111)
Existing law, until January 1, 2017 authorizes a pilot program at the University of California (UC) to award construction contracts on a "best value" basis, rather than just to the lowest bid. (Public Contract Code §10506.4)
Existing law defines "best value," for purposes of the UC, as a procurement process whereby the lowest responsible bidder may be selected on the basis of objective criteria with the resulting selection representing the best combination of price and qualifications. (Public Contract Code § 10506.5)
ANALYSIS
This bill:
Authorizes the governing board of the Los Angeles Unified School District (LAUSD), before December 31, 2020, to use best value procurement for projects over $1 million.
Generally outlines the definitions, policies, and procedures to be followed by the LAUSD consistent with current law provisions applicable to best value contracting by the UC (Public Contract Code, Chapter 2.1, Article 1.5, commencing with § 10506.4) and additionally requires that:
Specified “skilled and trained workforce” requirements are met.
Specified proceeds retention and surety bond conditions are met.
Subcontracting fair practices are followed.
Los Angeles Unified School District (LAUSD) weigh, at minimum and as deemed appropriate, factors such as relevant experience, acceptable safety record and other factors identified in a request for proposal in determining qualification scores for each bid, and specifically assign preference of up to 5% to small businesses, as defined by the LAUSD.
Establishes the following additional definitions for purposes of the pilot:
“Best value score” as the resulting score when the bidder’s price is divided by the bidder’s qualification score.
“Skilled journeyperson” as a worker who either graduated from an applicable apprenticeship program which met specified state or federal approval requirements, or had at least as many hours of on-the-job experience in an applicable occupation as would be required for graduation from a state-approved apprenticeship program.
“Apprenticeable occupation” as an occupation for which the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations had approved an apprenticeship program before January 1, 2015.
“Skilled and trained workforce” as a workforce in which all the workers are skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations and establishes the following phased-in implementation of the proportion of skilled journeypersons and subcontractors at every tier, employed that must be approved apprenticeship program graduates to meet the condition of having a “skilled and trained workforce”:
At least 30% by January 1, 2016.
At least 40% by January 1, 2017.
At least 50% by January 1, 2018.
At least 60% by January 1, 2019.
At least 70% by January 1, 2020.
Provides that, for an apprenticeable occupation with no approved program prior to January 1, 1995, up to one-half of the apprenticeship program graduate percentage requirements may be met by skilled journeypersons who commenced work in the occupation prior to the approval of an applicable apprentice program in the county of the project’s location.
Prohibits the prequalification or shortlisting of a best value entity absent an enforceable commitment to use a skilled and trained workforce for all work on the project/contract as applicable and provides that this commitment may be established by:
An agreement between the entity and the school district governing board to comply with these requirements and the provision of monthly evidence demonstrating such compliance during the performance of the project/contract.
A project labor agreement (PLA), entered into by the school district governing board, that includes these requirements and that binds all contractors/subcontractors working on the project/contract and agreement by the entity to become a party to the PLA.
Evidence that the entity has entered into a PLA that includes these requirements and that binds the entity and all its subcontractors at every tier performing the project/contract.
Establishes related reporting requirements. More specifically it:
Requires the Los Angeles Unified School District (LAUSD) to submit an interim report and a final report, conducted by an independent third party, containing specified information on the use of best value to the Legislative Analyst’s Office (LAO) by July 1, 2018, and January 1, 2020, respectively.
Requires the LAO to submit an interim report and a final report, on the use of best value, as specified, to the appropriate policy and fiscal committees of the Legislature by January 1, 2019, and July 1, 2020, respectively, to evaluate whether the best value procurement method should be continued, expanded, or prohibited.
Clarifies that the best value procurement method is not intended to change guideline, criterion, procedure, or requirement of the governing board to let a project contract to the lowest responsible bidder other than those specifically provided for in the bill’s provisions.
Sunsets these provisions on January 1, 2021.
STAFF COMMENTS
Need for the bill. According to the author, this bill will empower LAUSD to consider qualifications other than just price. The current lowest bidder process restricts the ability of school districts to evaluate bidders on the basis of prior school construction experience, previous violations of health and safety laws, disqualification or removal from prior school construction jobs, and financial stability. This bill can ensure that the district can consider the bidder's experience or knowledge to navigate the school construction process when selecting a contractor, minimizing project delays and cost overruns.
Best Value Pilot Program. SB 667 (Migden), Chapter 367, Statutes of 2006, established a pilot program for the University of California (UC). Initially authorized for five years, the bill allowed the UC San Francisco to award contracts based on the best value for the university. Under this process, UC prequalifies bidders, then evaluates the bid based on answers to a separate best value questionnaire and assigns a qualification score. UC then divides each bidder's price by its qualification score. The lowest resulting cost per quality point represents the best value bid.
In a report to the Legislature in January 2010, the University of California (UC) reported that 23 contracts totaling $158.3 million were issued under the best value pilot program. Of the 23 contracts, 12 contracts were low bid contracts. According to the report, the "University Representatives for all these projects [four completed and two almost completed projects] have been unanimous in their praise of this process that has already demonstrated numerous advantages such as decreased bid protests and communication problems, decreased the need for multiple inspections and re-work, decreased disputes, change order requests, claims and litigation and increased incentives for contractors to perform their work safety and to adhere to high labor and quality standards." UC concludes that the best value pilot program fosters better quality work, less labor and safety problems, better qualified persons/contractors, better on-time completion, and better on-budget performance. In 2011, SB 835 (Wolk, Chapter 636, Statutes of 2011), expanded the authority to all UC campuses and extended the sunset from January 1, 2012, to January 1, 2017.
The provisions of this bill are generally based upon the pilot program authorized for the UC, but codify more prescriptive requirements around labor, contractors and subcontractors, and the weighting of certain factors in the evaluation of bids.
Skilled workforce provisions. The provisions of this bill relative to a skilled workforce are very similar to recently adopted provisions regarding the use of a design-build method for awarding public works contracts by state and local agencies (SB 785, Chapter 931, Statutes of 2014), as well as contracts for the construction, alteration, demolition, installation, repair, or maintenance work at petroleum refineries (SB 54, Chapter 795, Statutes of 2013). In addition, these provisions were a component of SB 566 (O’Donnell), which was heard and passed by this Committee on June 10, 2015, by a vote of 6-2.
Fiscal implications. To the extent this bill results in the awarding of contracts to other than the lowest bidder, contracting costs could increase. It is unclear whether the resultant savings from reduced change orders and delays would offset these costs. Staff notes that Legislative Counsel has identified this bill as non-fiscal. However, the Senate Rules Committee has referred the bill to the Senate Appropriations Committee, at their request. If it is the desire of the committee to move this bill, the bill should be referred to the Senate Appropriations Committee.
Prior Legislation. This bill is almost identical to AB 1971 (Bocanegra, 2014) which was heard and passed by this Committee in June 2014, by a vote of 4-1. AB 1971 was never acted upon on the Senate Floor.
SUPPORT
Los Angeles Unified School District
OPPOSITION
Air Conditioning Trade Association
Associated Builders and Contractors of California
Associated Builders and Contractors – San Diego Chapter
Plumbing-Heating-Colling Contractors Association of California
Western Electrical Contractors Association
-- END --
AB 1185
Page 8
ASSEMBLY THIRD READING
AB 1185
(Ridley-Thomas)
As Amended May 20, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Education |
5-2 |
O'Donnell, McCarty, Santiago, Thurmond, Weber |
Chávez, Kim |
SUMMARY: Authorizes the Los Angeles Unified School District (LAUSD) to utilize a best value procurement process as a pilot project until December 31, 2020, for construction projects over $1 million. Specifically, this bill:
Expresses the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. Finds and declares that the Legislature has recognized the merits of best value procurement through its authorization of the method by the University of California (UC). Through UC's report, best value procurement method has been found to reduce contract delays, change orders, and claims, thereby producing savings in both contract costs and administration.
Establishes the following definitions:
"Apprenticeable Occupation" means an occupation for which the Chief of the Division of Apprenticeship Standards (DAS) had approved an apprenticeship program pursuant to Labor Code Section 3075 prior to January 1, 2015.
"Best value" means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
"Best value contract" means a contract entered into pursuant to this bill.
"Best value contractor" means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.
"Best Value Score" means the resulting score when the school district divides the bidder's price by the bidder's qualification score.
"Demonstrated management competency" means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
"Financial condition" means the financial resources needed to perform the contract. The criteria used to evaluate a bidder's financial condition shall include, at a minimum, capacity to obtain all required payment bonds, and required insurance.
"Governing board" or "governing board of the school district" means the governing board of the LAUSD.
"Labor compliance" means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidder's labor compliance shall include, at a minimum, the bidder's ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
"Project" has the same meaning as "public project" is defined in Public Contract Code (PCC) Section 22002(c).
"Qualifications" means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
"Relevant experience" means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
"Safety record" shall be deemed "acceptable" as determine by the school district. In its determination, the school district shall consider, but is not required to find, a contractor's safety record as acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Labor Code Section 3201.5.
"School district" means the LAUSD.
"Skilled and trained workforce" means a workforce that meets of the following conditions:
All workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the DAS; and,
Individuals employed to perform work on the contract or project are comprised of skilled journeypersons and subcontractors at every tier that are graduates of an apprenticeship program approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor, meeting the specified percentages and timeline:
At least 30% by January 1, 2016.
At least 40% by January 1, 2017.
At least 50% by January 1, 2018.
At least 60% by January 1, 2019.
At least 70% by January 1, 2020.
Specifies that for an apprenticeable occupation in which no apprenticeship program had been approved by the Chief of DAS before January 1, 1995, up to one-half of the graduation percentage requirements may be satisfied by skilled journeypersons who commenced working in the apprenticable occupation prior to the chief's approval of an apprenticeship program for that occupation in the county in which the project is located.
"Skilled journeyperson" means a worker who either: (1) graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to apprenticeship regulations adopted by the Secretary of Labor, or (2) has at least as many hours of on-the-job experience in an applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
Specifies that the bidder may be selected on the basis of the best value to the governing board of the school district. Requires the governing board of the school district to adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. Requires the procedures and guidelines to conform to this bill and to be mandatory for the school district when using best value selection.
Specifies that if the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the third lowest best value score.
Specifies that the governing board of the school district shall let any contract for a project pursuant to this bill to the selected bidder that represents the best value or else reject all bids.
Specifies that if the school district elects to award a project pursuant to this bill, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5% if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
Specifies that in a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
Provides that all subcontractors that are identified in the proposal shall be afforded protections under the Subletting and Subcontracting Fair Practices Act.
Requires the governing board of a school district to use the following procedure when awarding best value contracts:
The governing board of the school district shall prepare a solicitation for bids and give notice pursuant to PCC Section 20112.
The governing board of the school district shall establish a procedure to prequalify bidders. Specifies that information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act.
Specifies that a best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
Provides that an entity's commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
The entity’s agreement with the governing board of the school district that the entity and its subcontractors at every tier will comply with the requirements specified in this bill and that the entity will provide the governing board of the school district with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this bill.
If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this bill, the entity’s agreement that it will become a party to that project labor agreement.
Evidence that the entity has entered into a project labor agreement that includes the requirements of this bill and that will bind the entity and all its subcontractors at every tier performing the project or contract.
Each solicitation for bids shall do all of the following:
Invite prequalified bidders to submit sealed bids in the manner prescribed by this bill.
Include a section identifying and describing the following:
Criteria that the governing board of the school district will consider in evaluating the qualifications of the bidders.
The methodology and rating or weighting system that will be used by the governing board of the school district in evaluating bids and specifically whether proposals will be rated according to numeric or qualitative values.
The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
Requires the selection of the best value contractor to be made as follows:
The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighed as deemed appropriate by the school districts:
Relevant experience.
Safety record.
Other factors identified in the request for proposal.
To determine the best value contractor, the governing board of the school district shall divide each bidder’s price by its qualifications score. A preference of up to 5% shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidder’s price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
The governing board of the school district shall issue a written decision of its contract award or else reject all bids.
Upon issuance of a contract award, the governing board of the school district shall publicly announce its award identifying the project, the project price, and the best value contractor, to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
Requires a school district that uses the best value procurement method pursuant to this bill to submit to the Legislative Analyst the following reports completed by an independent third party:
An interim report on or before July 1, 2018.
A final report on or before January 1, 2020.
A report shall include, but is not limited to, the following information:
A description of the projects awarded using the best value procedures.
The contract award amounts.
The best value contractors awarded the projects.
A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
A description of the prequalification process.
The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
Requires the Legislative Analyst to submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to this bill and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
Specifies that the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
Sunsets on January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
Finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the LAUSD to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS: Background. Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Under the traditional method for school facility construction, a school district would first hire an architect to design a school facility and then issue a bid for the construction phase, awarding the contract to the lowest bidder. This process is commonly called "design-bid-build".
UC Best Value Pilot Program. This bill is based on SB 667 (Migden), Chapter 367, Statutes of 2006, which established a best value pilot program for the UC. Initially authorized for five years, SB 667 allowed the UC San Francisco to award contracts based on the best value for the university. Under this process, UC prequalifies bidders, then evaluates the bid based on answers to a separate best value questionnaire and assigns a qualification score. UC then divides each bidder's price by its qualification score. The lowest resulting cost per quality point represents the best value bid.
In a report to the Legislature in January 2010, the UC reported that 23 contracts totaling $158.3 million were issued under the best value pilot program. Of the 23 contracts, 12 contracts were low bid contracts. According to the report, the "University Representatives for all these projects [four completed and two almost completed projects] have been unanimous in their praise of this process that has already demonstrated numerous advantages such as decreased bid protests and communication problems, decreased the need for multiple inspections and re-work, decreased disputes, change order requests, claims and litigation and increased incentives for contractors to perform their work safety and to adhere to high labor and quality standards." UC concludes that the best value pilot program fosters better quality work, less labor and safety problems, better qualified persons/contractors, better on-time completion, and better on-budget performance. In 2011, SB 835 (Wolk), Chapter 636, Statutes of 2011, expanded the authority to all UC campuses and extended the sunset from January 1, 2012, to January 1, 2017.
What does this bill do? This bill establishes a best value procurement process as a pilot project for LAUSD, in addition to awarding contracts through the traditional design-bid-build process. "Best value" is defined as a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications. The authority applies to projects over $1 million and will enable LAUSD to consider other factors, in addition to cost, in awarding construction contracts.
Guidelines. This bill requires LAUSD to adopt procedures and required guidelines for evaluating the qualifications of bidders to ensure that the process is fair and impartial. A prequalification process based on a questionnaire and a rating scale is required, although LAUSD already uses a prequalification process. The solicitation for bids will invite prequalified bidders to submit sealed bids. The solicitation for bids must also include information on how the school district will be evaluating the qualification of bidders, including the criteria that will be used, the methodology and the rating or weighting system that will be used, and the weight that will be assigned to the criteria for evaluation.
Qualification score. Similar to UC's best value pilot program, this bill requires the LAUSD to evaluate the qualification of the bidders solely upon the criteria specified in the solicitation documents and assign a qualification score to each bid. A bidder's price is divided by the qualification score received by the bidder. The bidder with the lowest cost per quality point represents the best value bid. The factors required to be used by this bill are slightly different than the factors used in the UC pilot program. The factors used by the UC included the bidder's financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record. This bill specifies the use of relevant experience, safety record, and other factors identified in the request for proposal in determining the qualification score. Relevant experience and safety record are factors commonly used in the questionnaire for prequalification. According to the sponsor, the LAUSD, whereas the prequalification questionnaire may determine minimum qualifications, the information solicited through the best value procurement method will enable a school district to evaluate a bidder's qualification and background based on more specific needs of a project.
Prior legislation. This bill was introduced last session as AB 1971 (Bocanegra) of 2014. The author held AB 1971 on the Senate floor. This bill modifies AB 1971 by deleting the specified weight that must be given to relevant expertise, skilled and trained workforce and acceptable safety record. This bill, instead, makes the use of a "skilled and trained" workforce as a requirement for participation rather than a factor in determining best value, and leaves the weight of the factors unspecified. "Skilled and trained workforce" is defined as a workforce where all of the workers working on the project are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of DAS under the Division of Industrial Relations.
Arguments in support. The author states, "With billions of dollars in state and local funds being spent on school construction projects throughout the state it is imperative that school districts have the necessary tools to reduce risk and maximize efficiencies. The best value procurement process would create transparent and objective criteria that will result in the selection of a quality contractor and a good history at a competitive price."
Arguments in opposition. The Associated Builders and Contractors of California (ABC California) states that this bill "will make it even more difficult for non-union contractors to participate in the best value pilot program proposed for the Los Angeles Unified School District (LAUSD)." ABC California further states, "The 'skilled workforce' requirement is proposed by building trade unions as a new way to block local, non-union, minority and women-owned construction employers and their employees from participation in the LAUSD best value contracting process."
Analysis Prepared by: Sophia Kwong Kim / ED. / (916) 319-2087 FN: 0000482
AB 1185
Page 9
Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
AB 1185
(Ridley-Thomas) – As Amended May 6, 2015
SUBJECT: Los Angeles Unified School District: best value procurement: pilot program
SUMMARY: Authorizes the Los Angeles Unified School District (LAUSD) to utilize a best value procurement process as a pilot project until December 31, 2020 for construction projects over $1 million. Specifically, this bill:
Expresses the intent of the Legislature to enable school districts to use cost-effective options for building and modernizing school facilities. Finds and declares that the Legislature has recognized the merits of best value procurement through its authorization of the method by the University of California (UC). Through UC's report, best value procurement method has been found to reduce contract delays, change orders, and claims, thereby producing savings in both contract costs and administration.
Establishes the following definitions:
“Apprenticeable Occupation” means an occupation for which the Chief of the Division of Apprenticeship Standards (DAS) had approved an apprenticeship program pursuant to Section 3075 of the Labor Code prior to January 1, 2015.
"Best value” means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
“Best value contract” means a contract entered into pursuant to this bill.
“Best value contractor” means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.
"Best Value Score" means the resulting score when the school district divides the bidder's price by the bidder's qualification score.
“Demonstrated management competency” means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
“Financial condition” means the financial resources needed to perform the contract. The criteria used to evaluate a bidder’s financial condition shall include, at a minimum, capacity to obtain all required payment bonds, and required insurance.
“Governing board” or “governing board of the school district” means the governing board of the LAUSD.
“Labor compliance” means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidder’s labor compliance shall include, at a minimum, the bidder’s ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with such requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
“Project” has the same meaning as “public project” is defined in subdivision (c) of Section 22002 of the Public Contract Code (PCC).
“Qualifications” means financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, to the extent relevant, the preceding qualifications as they pertain to all subcontractors proposed to be used by the bidder for designated portions of the work.
“Relevant experience” means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
"Safety record" shall be deemed "acceptable" as determine by the school district. In its determination, the school district shall consider, but is not required to find, a contractor's safety record as acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period do not exceed the applicable statistical standards for its business category, or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
"School district" means the LAUSD.
"Skilled and trained workforce" means a workforce that meets of the following conditions:
All workers are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
Individuals employed to perform work on the contract or project are comprised of skilled journeypersons and subcontractors at every tier that are graduates of an apprenticeship program approved by the chief or located outside California and approved for federal purposes pursuant to the apprenticeship regulations adopted by the federal Secretary of Labor, meeting the specified percentages and timeline:
At least 30% by January 1, 2016.
At least 40% by January 1, 2017.
At least 50% by January 1, 2018.
At least 60% by January 1, 2019.
At least 70% by January 1, 2020.
Specifies that for an apprenticeable occupation in which no apprenticeship program had been approved by the Chief of DAS before January 1, 1995, up to one-half of the graduation percentage requirements may be satisfied by skilled journeypersons who commenced working in the apprenticable occupation prior to the chief's approval of an apprenticeship program for that occupation in the county in which the project is located.
"Skilled journeyperson" means a worker who either: 1) graduated from an apprenticeship program for the applicable occupation that was approved by the chief or located outside California and approved for federal purposes pursuant to apprenticeship regulations adopted by the Secretary of Labor, or 2) has at least as many hours of on-the-job experience in an applicable occupation as would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the chief.
Specifies that the governing board of the school district shall let any contract for a project pursuant to this bill to the selected bidder that represents the best value or else reject all bids.
Specifies that the bidder may be selected on the basis of the best value to the governing board of the school district. Requires the governing board of the school district to adopt and publish procedures and required guidelines for evaluating the qualifications of the bidders that ensure the best value selections by the school district are conducted in a fair and impartial manner. Requires the procedures and guidelines to conform to this bill and to be mandatory for the school district when using best value selection.
Specifies that if the governing board of the school district deems it to be for the best interest of the school district, the governing board of the school district, on the refusal or failure of the selected bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score. If the second bidder fails or refuses to execute the contract, the governing board of the school district may likewise award it to the third lowest best value score.
Specifies that if the school district elects to award a project pursuant to this bill, retention proceeds withheld by the district from the selected best value contractor shall not exceed 5% if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
Specifies that in a contract between the selected best value contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the district and the selected best value contractor. If the selected best value contractor provides written notice to a subcontractor that, prior to or at the time the bid is requested, a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the selected best value contractor, then the selected best value contractor may withhold retention proceeds in excess of the percentage specified in the contract between the district and the selected best value contractor from any payment made by the selected best value contractor to the subcontractor.
Provides that all subcontractors that are identified in the proposal shall be afforded protections under the Subletting and Subcontracting Fair Practices Act.
Requires the governing board of a school district to use the following procedure when awarding best value contracts:
The governing board of the school district shall prepare a solicitation for bids and give notice pursuant to PCC Section 20112.
The governing board of the school district shall establish a procedure to prequalify bidders. Specifies that information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act.
Specifies that a best value entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the governing board that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
Provides that an entity's commitment that a skilled and trained workforce will be used to perform the project or contract may be established by any of the following:
The entity’s agreement with the governing board of the school district that the entity and its subcontractors at every tier will comply with the requirements specified in this bill and that the entity will provide the director with evidence, on a monthly basis while the project or contract is being performed, that the entity and its subcontractors are complying with the requirements of this bill.
If the governing board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract and that includes the requirements of this bill, the entity’s agreement that it will become a party to that project labor agreement.
Evidence that the entity has entered into a project labor agreement that includes the requirements of this bill and that will bind the entity and all its subcontractors at every tier performing the project or contract.
Each solicitation for bids shall do all of the following:
Invite prequalified bidders to submit sealed bids in the manner prescribed by this bill.
Include a section identifying and describing the following:
Criteria that the governing board of the school district will consider in evaluating the qualifications of the bidders.
The methodology and rating or weighting system that will be used by the governing board of the school district in evaluating bids and specifically whether proposals will be rated according to numeric or qualitative values.
The relative importance or weight assigned to the criteria for evaluating the qualifications of bidders identified in the request for bids.
Final evaluation of the bidders shall be done in a manner that prevents the identity of the bidders and the cost or price information from being revealed in evaluating the qualifications of the bidders prior to completion of qualification scoring.
Requires the selection of the best value contractor to be made as follows:
The school district shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualification score to each bid.
Qualification scores shall be determined by using only the criteria and selection procedures specifically identified in the request for proposals. The following minimum factors, however, shall be weighed as deemed appropriate by the school districts:
Relevant experience.
Safety record.
Other factors identified in the request for proposal.
To determine the best value contractor, the governing board of the school district shall divide each bidder’s price by its qualifications score. A preference of up to 5% shall be applied to the price of a bid submitted by a small business, as defined by the school district, before dividing the bidder’s price by its qualification score. The lowest resulting cost per quality point will represent the best value bid. The award of the contract shall be made to the bidder whose bid is determined, by the school district in writing, to be the best value to the school district.
The governing board of the school district shall issue a written decision of its contract award or else reject all bids.
Upon issuance of a contract award, the governing board of the school district shall publicly announce its award identifying the project, the project price, and the best value contractor, to which the award is made, as well as the prices, qualification scores, and resulting costs per qualification point for all responsive bidders. The contract file shall include documentation sufficient to support the decision to award.
Requires a school district that uses the best value procurement method pursuant to this bill to submit to the Legislative Analyst the following reports completed by an independent third party:
An interim report on or before July 1, 2018.
A final report on or before January 1, 2020.
A report shall include, but is not limited to, the following information:
A description of the projects awarded using the best value procedures.
The contract award amounts.
The best value contractors awarded the projects.
A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests.
A description of the prequalification process.
The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology.
If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases.
Requires the Legislative Analyst to submit an interim report to the appropriate policy and fiscal committees of the Legislature on the use of the best value procurement method by school districts on or before January 1, 2019, and a final report on or before July 1, 2020. The report may include the information provided from the school district reports pursuant to this bill and any pertinent information that the Legislative Analyst deems instructive in evaluating whether the best value procurement method should be continued, expanded, or prohibited.
Specifies that the best value procurement method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
Sunsets on January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
Finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the need to establish a pilot project for the LAUSD to determine the potential benefits and consequences of using best value procurement to facilitate infrastructure improvements and ease fiscal impacts.
EXISTING LAW:
Requires the governing board of a school district to competitively bid and award to the lowest bidder contracts involving the following:
An expenditure of $50,000 or more for the purchase of equipment, materials, or supplies, services (except for construction services), and repairs.
An expenditure of $15,000 or more for a public contract project defined as construction, reconstruction, erection, alteration, renovation, improvement, demolition, repair, painting or repainting of any publicly owned, leased, or operated facility. (PCC) Sections 20111 and 22002)
Establishes a process, until January 1, 2020, for school district and community college district governing boards to enter into a design-build contract for both the design and construction of education facility projects over $2.5 million. (Education Code (EC) Section 17250.20)
Specifies the elements required to be included in a design-build request for proposal (including significant factors, subfactors, methodology, rating and weighting schemes for evaluating proposals) and establishes, among others, prequalification, bonding and labor compliance program requirements (EC Sections 17250.10 – 17250.50 and 81700-81708)
Requires, until January 1, 2019, a school district with an average daily attendance of more than 2,500 using state school facility bond funds for a public project with an expenditure of $1 million or more to require prospective bidders, and if utilized, all electrical, mechanical, and plumbing subcontractors, to complete and submit a standardized prequalification questionnaire and financial statement. (PCC Section 20111.6)
Authorizes, until January 1, 2017, the UC to use the best value method to award contracts based on best value procedures. (PCC Section 10506.4)
FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS: Background. Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Under the traditional method for school facility construction, a school district would first hire an architect to design a school facility and then issue a bid for the construction phase, awarding the contract to the lowest bidder. This process is commonly called "design-bid-build".
Design Build. Existing law authorizes two other temporary methods for awarding public contracts that are not based solely on the lowest bidder. AB 1402 (Simitian), Chapter 421, Statutes of 2001, established a process called "design-build" that enables a school district to issue a bid for both the design and construction of projects over $10 million and authorizes school districts to consider factors other than cost. Under a design-build process, a K-12, California Community College (CCC) district, or other public or private agency issues a bid for both design and construction of a facility. A general contractor may collaborate with an architect/engineer to submit a proposal, or a general contractor may submit the proposal and subcontract with an architect/engineer.
Prior to using a design-build process for a project, a school district must make written findings that using the design-build method for the project will meet at least one of the following objectives: reduce comparable project costs, expedite the project's completions, or provide features not achievable through the traditional design-bid-build process. The school district must also establish a process to prequalify design-build entities using a standard questionnaire developed by the Department of Industrial Relations. The questionnaire requires contractors to provide detailed information regarding the company and its financial status.
Rather than selecting the contractor based solely on the lowest offer, the K-12 or CCC district may use criteria in addition to cost, which may include qualification, experience, proposed design approach, life cycle costs, project features and project functions. Based on the criteria selected by a governing board, the proposals are scored and awarded to the bidder whose proposal is considered to be the best value to the school district1. Design build contracting can expedite the construction of a project, avoid conflicts between architects/engineers and contractors, and according to experiences from school and CCC districts, reduce costs by reducing change orders once construction begins. The authorization for design build sunsets on January 1, 2020.
Best Value Pilot Program. SB 667 (Migden), Chapter 367, Statutes of 2006, established a pilot program for the UC. Initially authorized for five years, SB 667 allowed the UC San Francisco to award contracts based on the best value for the university. Under this process, UC prequalifies bidders, then evaluates the bid based on answers to a separate best value questionnaire and assigns a qualification score. UC then divides each bidder's price by its qualification score. The lowest resulting cost per quality point represents the best value bid.
In a report to the Legislature in January 2010, the UC reported that 23 contracts totaling $158.3 million were issued under the best value pilot program. Of the 23 contracts, 12 contracts were low bid contracts. According to the report, the "University Representatives for all these projects [four completed and two almost completed projects] have been unanimous in their praise of this process that has already demonstrated numerous advantages such as decreased bid protests and communication problems, decreased the need for multiple inspections and re-work, decreased disputes, change order requests, claims and litigation and increased incentives for contractors to perform their work safety and to adhere to high labor and quality standards." UC concludes that the best value pilot program fosters better quality work, less labor and safety problems, better qualified persons/contractors, better on-time completion, and better on-budget performance. In 2011, SB 835 (Wolk), Chapter 636, Statutes of 2011, expanded the authority to all UC campuses and extended the sunset from January 1, 2012 to January 1, 2017.
What does this bill do? This bill establishes a best value procurement process as a pilot project for LAUSD, in addition to awarding contracts through the traditional design-bid-build process. "Best value" is defined as a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications. The authority applies to projects over $1 million and will enable LAUSD to consider other factors, in addition to cost, in awarding construction contracts.
Guidelines. The bill requires LAUSD to adopt procedures and required guidelines for evaluating the qualifications of bidders to ensure that the process is fair and impartial. A prequalification process based on a questionnaire and a rating scale is required, although LAUSD already uses a prequalification process. The solicitation for bids will invite prequalified bidders to submit sealed bids. The solicitation for bids must also include information on how the school district will be evaluating the qualification of bidders, including the criteria that will be used, the methodology and the rating or weighting system that will be used, and the weight that will be assigned to the criteria for evaluation.
Qualification score. Similar to UC's best value pilot program, this bill requires the LAUSD to evaluate the qualification of the bidders solely upon the criteria specified in the solicitation documents and assign a qualification score to each bid. A bidder's price is divided by the qualification score received by the bidder. The bidder with the lowest cost per quality point represents the best value bid. The factors required to be used by this bill are slightly different than the factors used in the UC pilot program. The factors used by the UC included the bidder's financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record. This bill specifies the use of relevant experience, safety record, and other factors identified in the request for proposal in determining the qualification score. Relevant experience and safety record are factors commonly used in the questionnaire for prequalification. According to the sponsor, the LAUSD, whereas the prequalification questionnaire may determine minimum qualifications, the information solicited through the best value procurement method will enable a school district to evaluate a bidder's qualification and background based on more specific needs of a project.
Prior session. This bill was introduced last session as AB 1971 (Bocanegra). The author held the bill on the Senate floor. This bill modifies AB 1971 by deleting the specified weight that must be given to relevant expertise, skilled and trained workforce and acceptable safety record. The bill, instead, makes the use of a "skilled and trained" workforce as a requirement for participation rather than a factor in determining best value, and leaves the weight of the factors unspecified. "Skilled and trained workforce" is defined as a workforce where all of the workers working on the project are either skilled journeypersons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards under the Division of Industrial Relations.
Arguments in support. The author states, "With billions of dollars in state and local funds being spent on school construction projects throughout the state it is imperative that school districts have the necessary tools to reduce risk and maximize efficiencies. The best value procurement process would create transparent and objective criteria that will result in the selection of a quality contractor and a good history at a competitive price."
Arguments in opposition. The Associated Builders and Contractors of California (ABC California) has an oppose unless amended position on the bill and states that the bill "will make it even more difficult for non-union contractors to participate in the best value pilot program proposed for the Los Angeles Unified School District (LAUSD)." ABC California further states, "The 'skilled workforce' requirement is proposed by building trade unions as a new way to block local, non-union, minority and women-owned construction employers and their employees from participation in the LAUSD best value contracting process." ABC California suggests changing the effective date of the bill to January 1, 2018.
Committee amendments:
Correct a spelling error on page 2, line 26, from "Aprenticeship" to "Apprenticeship."
Change "director" to "governing board of the school district" on page 8, line 4.
Strike subdivision (c) of Section 20119.2 and reinsert as a new subdivision after subdivision (e).
Prior legislation. AB 1971 (Bocanegra), introduced last session, is substantially similar to this bill. The bill was held in the Senate by the author.
SB 835 (Wolk), Chapter 636, Statutes of 2011, extended the sunset of the best value pilot program for the UC to January 1, 2017 and expanded the program to all UC campuses.
SB 667 (Migden), Chapter 367, Statutes of 2006, established the best value pilot program for the UC San Francisco campus for five years.
REGISTERED SUPPORT / OPPOSITION:
Support
Los Angeles Unified School District (sponsor)
Opposition
Associated Builders and Contractors of California (unless amended)
Analysis Prepared by: Sophia Kwong Kim / ED. / (916) 319-2087
1 "Best value" for the purposes of design build does not have the same definition as that proposed by this bill. For design build, "best value" is defined as "a value determined by objective criteria and may include, but need not be limited to, price, features, functions, life-cycle costs, and other criteria deemed appropriate by the school district."
Discussed in Hearing
48SEC
Assembly Floor
2MIN
Senate Floor
1MIN
Senate Standing Committee on Appropriations
11MIN
Senate Standing Committee on Education
1MIN
Assembly Floor
6MIN
Assembly Standing Committee on Education
Bill Author
Bill Co-Author(s):