AB 2690: Los Angeles County Metropolitan Transportation Authority: contracting.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-08-26
Existing law creates the Los Angeles County Metropolitan Transportation Authority (LACMTA), with various powers and duties with respect to transportation planning, programming, construction, and operations.
Existing law authorizes LACMTA to provide for a small business preference of 5% of the lowest responsible bidder meeting specifications, with respect to contracts in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. Existing law also authorizes LACMTA to establish a subcontracting participation goal for small businesses on certain contracts financed with nonfederal funds and to grant a preference of 5% to the lowest responsible bidders that meet that goal.
This bill would also authorize LACMTA to establish disabled veteran business enterprise participation goals, and would define disabled veteran business enterprise for these purposes.
Existing law imposes various requirements on bidders relative to contracts involving small business enterprise goals.
This bill would delete those requirements and instead authorize LACMTA to require bidders to comply with small business enterprise and disabled veteran business enterprise goals and requirements established by LACMTA relative to contracts financed with nonfederal funds. The bill would also authorize LACMTA to award contracts under certain circumstances to small business enterprises with respect to work that is set aside for competition among certified small business enterprises, and would require the authority to report to the Legislature by December 31, 2017, regarding any contracts awarded in this regard.
Existing law creates the Los Angeles County Metropolitan Transportation Authority (LACMTA), with various powers and duties with respect to transportation planning, programming, construction, and operations.
Existing law authorizes LACMTA to provide for a small business preference of 5% of the lowest responsible bidder meeting specifications, with respect to contracts in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. Existing law also authorizes LACMTA to establish a subcontracting participation goal for small businesses on certain contracts financed with nonfederal funds and to grant a preference of 5% to the lowest responsible bidders that meet that goal.
This bill would also authorize LACMTA to establish disabled veteran business enterprise participation goals, and would define disabled veteran business enterprise for these purposes.
Existing law imposes various requirements on bidders relative to contracts involving small business enterprise goals.
This bill would delete those requirements and instead authorize LACMTA to require bidders to comply with small business enterprise and disabled veteran business enterprise goals and requirements established by LACMTA relative to contracts financed with nonfederal funds. The bill would also authorize LACMTA to award contracts under certain circumstances to small business enterprises with respect to work that is set aside for competition among certified small business enterprises, and would require the authority to report to the Legislature by December 31, 2017, regarding any contracts awarded in this regard.
Existing law creates the Los Angeles County Metropolitan Transportation Authority (LACMTA), with various powers and duties with respect to transportation planning, programming, construction, and operations.
Existing law authorizes LACMTA to provide for a small business preference of 5% of the lowest responsible bidder meeting specifications, with respect to contracts in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. Existing law also authorizes LACMTA to establish a subcontracting participation goal for small businesses on certain contracts financed with nonfederal funds and to grant a preference of 5% to the lowest responsible bidders that meet that goal.
This bill would also authorize LACMTA to establish disabled veteran business enterprise participation goals, and would define disabled veteran business enterprise for these purposes.
Existing law imposes various requirements on bidders relative to contracts involving small business enterprise goals.
This bill would delete those requirements and instead authorize LACMTA to require bidders to comply with small business enterprise and disabled veteran business enterprise goals and requirements established by LACMTA relative to contracts financed with nonfederal funds. The bill would also authorize LACMTA to award contracts under certain circumstances to small business enterprises with respect to work that is set aside for competition among certified small business enterprises. enterprises, and would require the authority to report to the Legislature by December 31, 2017, regarding any contracts awarded in this regard.
Existing law creates the Los Angeles County Metropolitan Transportation Authority (LACMTA), with various powers and duties with respect to transportation planning, programming, construction, and operations.
Existing law authorizes LACMTA to provide for a small business preference of 5% of the lowest responsible bidder meeting specifications, with respect to contracts in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. Existing law also authorizes LACMTA to establish a subcontracting participation goal for small businesses on certain contracts financed with nonfederal funds and to grant a preference of 5% to the lowest responsible bidders that meet that goal.
This bill would also authorize LACMTA to establish disabled veteran business enterprise participation goals, and would define disabled veteran business enterprise for these purposes.
Existing law imposes various requirements on bidders relative to contracts involving small business enterprise goals.
This bill would delete those requirements and instead authorize LACMTA to require bidders to comply with small business enterprise and disabled veteran business enterprise goals and requirements established by LACMTA relative to contracts financed with nonfederal funds. The bill would also authorize LACMTA to award contracts under certain circumstances to small business enterprises with respect to work that is set aside for competition among certified small business enterprises.
(a)Except as provided in subdivision (f), purchase of all supplies, equipment, and materials, and the construction of all facilities and works, when the expenditure required exceeds twenty-five thousand dollars ($25,000), shall be by contract let to the lowest responsible bidder. Notice requesting bids shall be published at least once in a newspaper of general circulation. The publication shall be made at least 10 days before the date for the receipt of the bids. The commission, at its discretion, may reject any and all bids and readvertise.
(b)Except as provided for in subdivision (f), whenever the expected expenditure required exceeds one thousand dollars ($1,000), but not twenty-five thousand dollars ($25,000), the commission shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared.
(c)Where the expenditure required by the bid price is less than fifty thousand dollars ($50,000), the executive director may act for the commission.
(d)All bids for construction work submitted pursuant to this section shall be presented under sealed cover and shall be accompanied by one of the following forms of bidders security:
(1)Cash.
(2)A cashiers check made payable to the commission.
(3)A certified check made payable to the commission.
(4)A bidders bond executed by an admitted surety insurer, made payable to the commission.
(e)Upon an award to the lowest bidder, the security of an unsuccessful bidder shall be returned in a reasonable period of time, but in no event shall that security be held by the commission beyond 60 days from the date that the award was made.
(f)The following provisions apply only to the Los Angeles County Metropolitan Transportation Authority:
(1)The contract shall be let to the lowest responsible bidder or, in the authoritys discretion, to the person who submitted a proposal that provides the best value to the commission on the basis of the factors identified in the solicitation when the purchase price of all supplies, equipment, and materials exceeds one hundred fifty thousand dollars ($150,000). Best value means the overall combination of quality, price, and other elements of a proposal that, when considered together, provide the greatest overall benefit in response to requirements described in the solicitation documents. The contract shall be let to the lowest responsible bidder when the purchase price of the construction of all facilities exceeds twenty-five thousand dollars ($25,000).
(2)The authority shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared whenever the expected expenditure required exceeds three thousand dollars ($3,000), but not one hundred fifty thousand dollars ($150,000).
(3)The authority may purchase supplies, equipment, and materials from a public auction sale, including public auctions held via the Internet, using the procedures established for all other participants in the public auction.
(4)The authority may participate in a procurement agreement involving other public entities that is identified by a procuring public entity or entities as a cooperative procuring agreement from which other public entities may make purchases or enter into contracts, and the authority may procure, and enter into contracts for, items purchased pursuant to that procurement agreement, notwithstanding that the authority may not be the procuring public entity, provided the procurement agreement is awarded or entered into by either of the following:
(A)One or more public entities or an organization of public entities, which may include the authority.
(B)A federal, state, or local public entity.
(5)(A)Notwithstanding any other provision of law requiring the authority to award contracts to the lowest responsible bidder, the authority may, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management as defined in Sections 4525 and 4529.10 of the Government Code, do any of the following in facilitating contract awards with small business enterprises and disabled veteran business enterprises:
(i)Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference to a small business shall be 5 percent of the lowest responsible bidder meeting specifications that provides for small business participation.
(ii)Establish a subcontracting participation goal for small business enterprises on contracts financed with nonfederal funds and grant a preference of 5 percent to the lowest responsible bidders who meet the goal.
(iii)Require bidders, prior to the time bids are opened, to comply with the small business enterprise and disabled veteran business enterprise goals and requirements established by the authority on contracts financed with nonfederal funds.
(iv)In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the small business enterprise and disabled veteran business enterprise goals.
(v)Set aside work for competition among certified small business enterprises and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds five thousand dollars ($5,000) but is less than three million dollars ($3,000,000), as long as price quotations are obtained by the authority from three or more certified small business enterprises. If the authority awards contracts under this clause, the authority, for purposes of legislative oversight, shall, on or before December 31, 2017, prepare and submit a report to the Legislature regarding contracts awarded pursuant to this clause. The report shall be submitted in compliance with Section 9795 of the Government Code.
(B)A small business enterprise recommended for a contract award through use of a set aside shall be performing a commercially useful function. A small business enterprise shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30 percent of the total cost of the contract work with its own workforce.
(C)Small business enterprise as used in this paragraph, means a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current small business enterprise size standards found in Part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform. The authority may establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owners personal residence.
(D)Disabled veteran business enterprise as used in this paragraph has the meaning as defined in Section 999 of the Military and Veterans Code.
(E)Goal as used in this paragraph means a numerically expressed objective that bidders are required to achieve.
(a)Except as provided in subdivision (f), purchase of all supplies, equipment, and materials, and the construction of all facilities and works, when the expenditure required exceeds twenty-five thousand dollars ($25,000), shall be by contract let to the lowest responsible bidder. Notice requesting bids shall be published at least once in a newspaper of general circulation. The publication shall be made at least 10 days before the date for the receipt of the bids. The commission, at its discretion, may reject any and all bids and readvertise.
(b)Except as provided for in subdivision (f), whenever the expected expenditure required exceeds one thousand dollars ($1,000), but not twenty-five thousand dollars ($25,000), the commission shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared.
(c)Where the expenditure required by the bid price is less than fifty thousand dollars ($50,000), the executive director may act for the commission.
(d)All bids for construction work submitted pursuant to this section shall be presented under sealed cover and shall be accompanied by one of the following forms of bidders security:
(1)Cash.
(2)A cashiers check made payable to the commission.
(3)A certified check made payable to the commission.
(4)A bidders bond executed by an admitted surety insurer, made payable to the commission.
(e)Upon an award to the lowest bidder, the security of an unsuccessful bidder shall be returned in a reasonable period of time, but in no event shall that security be held by the commission beyond 60 days from the date that the award was made.
(f)The following provisions apply only to the Los Angeles County Metropolitan Transportation Authority:
(1)The contract shall be let to the lowest responsible bidder or, in the authoritys discretion, to the person who submitted a proposal that provides the best value to the commission on the basis of the factors identified in the solicitation when the purchase price of all supplies, equipment, and materials exceeds one hundred fifty thousand dollars ($150,000). Best value means the overall combination of quality, price, and other elements of a proposal that, when considered together, provide the greatest overall benefit in response to requirements described in the solicitation documents. The contract shall be let to the lowest responsible bidder when the purchase price of the construction of all facilities exceeds twenty-five thousand dollars ($25,000).
(2)The authority shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared whenever the expected expenditure required exceeds three thousand dollars ($3,000), but not one hundred fifty thousand dollars ($150,000).
(3)The authority may purchase supplies, equipment, and materials from a public auction sale, including public auctions held via the Internet, using the procedures established for all other participants in the public auction.
(4)The authority may participate in a procurement agreement involving other public entities that is identified by a procuring public entity or entities as a cooperative procuring agreement from which other public entities may make purchases or enter into contracts, and the authority may procure, and enter into contracts for, items purchased pursuant to that procurement agreement, notwithstanding that the authority may not be the procuring public entity, provided the procurement agreement is awarded or entered into by either of the following:
(A)One or more public entities or an organization of public entities, which may include the authority.
(B)A federal, state, or local public entity.
(5)(A)Notwithstanding any other provision of law requiring the authority to award contracts to the lowest responsible bidder, the authority may, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management as defined in Sections 4525 and 4529.10 of the Government Code, do any of the following in facilitating contract awards with small business enterprises and disabled veteran business enterprises:
(i)Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference to a small business shall be 5 percent of the lowest responsible bidder meeting specifications that provides for small business participation.
(ii)Establish a subcontracting participation goal for small business enterprises on contracts financed with nonfederal funds and grant a preference of 5 percent to the lowest responsible bidders who meet the goal.
(iii)Require bidders, prior to the time bids are opened, to comply with the small business enterprise and disabled veteran business enterprise goals and requirements established by the authority on contracts financed with nonfederal funds.
(iv)In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the small business enterprise and disabled veteran business enterprise goals.
(v)Set aside work for competition among certified small business enterprises and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds five thousand dollars ($5,000) but is less than three million dollars ($3,000,000), as long as price quotations are obtained by the authority from three or more certified small business enterprises. If the authority awards contracts under this clause, the authority, for purposes of legislative oversight, shall, on or before December 31, 2017, prepare and submit a report to the Legislature regarding contracts awarded pursuant to this clause. The report shall be submitted in compliance with Section 9795 of the Government Code.
(B)A small business enterprise recommended for a contract award through use of a set aside shall be performing a commercially useful function. A small business enterprise shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30 percent of the total cost of the contract work with its own workforce.
(C)Small business enterprise as used in this paragraph, means a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current small business enterprise size standards found in Part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform. The authority may establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owners personal residence.
(D)Disabled veteran business enterprise as used in this paragraph has the meaning as defined in Section 999 of the Military and Veterans Code.
(E)Goal as used in this paragraph means a numerically expressed objective that bidders are required to achieve.
(a)Except as provided in subdivision (f), purchase of all supplies, equipment, and materials, and the construction of all facilities and works, when the expenditure required exceeds twenty-five thousand dollars ($25,000), shall be by contract let to the lowest responsible bidder. Notice requesting bids shall be published at least once in a newspaper of general circulation. The publication shall be made at least 10 days before the date for the receipt of the bids. The commission, at its discretion, may reject any and all bids and readvertise.
(b)Except as provided for in subdivision (f), whenever the expected expenditure required exceeds one thousand dollars ($1,000), but not twenty-five thousand dollars ($25,000), the commission shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared.
(c)Where the expenditure required by the bid price is less than fifty thousand dollars ($50,000), the executive director may act for the commission.
(d)All bids for construction work submitted pursuant to this section shall be presented under sealed cover and shall be accompanied by one of the following forms of bidders security:
(1)Cash.
(2)A cashiers check made payable to the commission.
(3)A certified check made payable to the commission.
(4)A bidders bond executed by an admitted surety insurer, made payable to the commission.
(e)Upon an award to the lowest bidder, the security of an unsuccessful bidder shall be returned in a reasonable period of time, but in no event shall that security be held by the commission beyond 60 days from the date that the award was made.
(f)The following provisions apply only to the Los Angeles County Metropolitan Transportation Authority:
(1)The contract shall be let to the lowest responsible bidder or, in the authoritys discretion, to the person who submitted a proposal that provides the best value to the commission on the basis of the factors identified in the solicitation when the purchase price of all supplies, equipment, and materials exceeds one hundred fifty thousand dollars ($150,000). Best value means the overall combination of quality, price, and other elements of a proposal that, when considered together, provide the greatest overall benefit in response to requirements described in the solicitation documents. The contract shall be let to the lowest responsible bidder when the purchase price of the construction of all facilities exceeds twenty-five thousand dollars ($25,000).
(2)The authority shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared whenever the expected expenditure required exceeds three thousand dollars ($3,000), but not one hundred fifty thousand dollars ($150,000).
(3)The authority may purchase supplies, equipment, and materials from a public auction sale, including public auctions held via the Internet, using the procedures established for all other participants in the public auction.
(4)The authority may participate in a procurement agreement involving other public entities that is identified by a procuring public entity or entities as a cooperative procuring agreement from which other public entities may make purchases or enter into contracts, and the authority may procure, and enter into contracts for, items purchased pursuant to that procurement agreement, notwithstanding that the authority may not be the procuring public entity, provided the procurement agreement is awarded or entered into by either of the following:
(A)One or more public entities or an organization of public entities, which may include the authority.
(B)A federal, state, or local public entity.
(5)(A)Notwithstanding any other provision of law requiring the authority to award contracts to the lowest responsible bidder, the authority may, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management as defined in Sections 4525 and 4529.10 of the Government Code, do any of the following in facilitating contract awards with small business enterprises and disabled veteran business enterprises:
(i)Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference to a small business shall be 5 percent of the lowest responsible bidder meeting specifications that provides for small business participation.
(ii)Establish a subcontracting participation goal for small business enterprises on contracts financed with nonfederal funds and grant a preference of 5 percent to the lowest responsible bidders who meet the goal.
(iii)Require bidders, prior to the time bids are opened, to comply with the small business enterprise and disabled veteran business enterprise goals and requirements established by the authority on contracts financed with nonfederal funds.
(iv)In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the small business enterprise and disabled veteran business enterprise goals.
(v)Set aside work for competition among certified small business enterprises and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds three five thousand dollars ($3,000) ($5,000) but is less than a threshold amount established by the authority, three million dollars ($3,000,000), as long as price quotations are obtained by the authority from three or more certified small business enterprises. If the authority awards contracts under this clause, the authority, for purposes of legislative oversight, shall, on or before December 31, 2017, prepare and submit a report to the Legislature regarding contracts awarded pursuant to this clause. The report shall be submitted in compliance with Section 9795 of the Government Code.
(vi)Set aside work for competition among certified small business enterprises and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds the authoritys threshold amount in clause (v) but is less than five million dollars ($5,000,000), as long as price quotations are obtained by the authority from three or more certified small business enterprises.
(B)A small business enterprise recommended for a contract award through use of a set aside shall be performing a commercially useful function. A small business enterprise shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30 percent of the total cost of the contract work with its own workforce.
(C)Small business enterprise as used in this paragraph, means a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current small business enterprise size standards found in Part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform. The authority may establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owners personal residence.
(D)Disabled veteran business enterprise as used in this paragraph has the meaning as defined in Section 999 of the Military and Veterans Code.
(E)Goal as used in this paragraph means a numerically expressed objective that bidders are required to achieve.
(a)Except as provided in subdivision (f), purchase of all supplies, equipment, and materials, and the construction of all facilities and works, when the expenditure required exceeds twenty-five thousand dollars ($25,000), shall be by contract let to the lowest responsible bidder. Notice requesting bids shall be published at least once in a newspaper of general circulation. The publication shall be made at least 10 days before the date for the receipt of the bids. The commission, at its discretion, may reject any and all bids and readvertise.
(b)Except as provided for in subdivision (f), whenever the expected expenditure required exceeds one thousand dollars ($1,000), but not twenty-five thousand dollars ($25,000), the commission shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared.
(c)Where the expenditure required by the bid price is less than fifty thousand dollars ($50,000), the executive director may act for the commission.
(d)All bids for construction work submitted pursuant to this section shall be presented under sealed cover and shall be accompanied by one of the following forms of bidders security:
(1)Cash.
(2)A cashiers check made payable to the commission.
(3)A certified check made payable to the commission.
(4)A bidders bond executed by an admitted surety insurer, made payable to the commission.
(e)Upon an award to the lowest bidder, the security of an unsuccessful bidder shall be returned in a reasonable period of time, but in no event shall that security be held by the commission beyond 60 days from the date that the award was made.
(f)The following provisions apply only to the Los Angeles County Metropolitan Transportation Authority:
(1)The contract shall be let to the lowest responsible bidder or, in the authoritys discretion, to the person who submitted a proposal that provides the best value to the commission on the basis of the factors identified in the solicitation when the purchase price of all supplies, equipment, and materials exceeds one hundred fifty thousand dollars ($150,000). Best value means the overall combination of quality, price, and other elements of a proposal that, when considered together, provide the greatest overall benefit in response to requirements described in the solicitation documents. The contract shall be let to the lowest responsible bidder when the purchase price of the construction of all facilities exceeds twenty-five thousand dollars ($25,000).
(2)The authority shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared whenever the expected expenditure required exceeds three thousand dollars ($3,000), but not one hundred fifty thousand dollars ($150,000).
(3)The authority may purchase supplies, equipment, and materials from a public auction sale, including public auctions held via the Internet, using the procedures established for all other participants in the public auction.
(4)The authority may participate in a procurement agreement involving other public entities that is identified by a procuring public entity or entities as a cooperative procuring agreement from which other public entities may make purchases or enter into contracts, and the authority may procure, and enter into contracts for, items purchased pursuant to that procurement agreement, notwithstanding that the authority may not be the procuring public entity, provided the procurement agreement is awarded or entered into by either of the following:
(A)One or more public entities or an organization of public entities, which may include the authority.
(B)A federal, state, or local public entity.
(5)(A)Notwithstanding any other provision of law requiring the authority to award contracts to the lowest responsible bidder, the authority may, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management as defined in Sections 4525 and 4529.10 of the Government Code, do any of the following in facilitating contract awards to with small businesses: business enterprises and disabled veteran business enterprises:
(i)Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference to a small business shall be 5 percent of the lowest responsible bidder meeting specifications that provide provides for small business participation.
(ii)Establish a subcontracting participation goal for small businesses business enterprises on contracts financed with nonfederal funds and grant a preference of 5 percent to the lowest responsible bidders who meet the goal.
(iii)Require bidders to make a good faith effort, in accordance with the criteria established pursuant to subparagraph (B), bidders, prior to the time bids are opened, to comply with the small business enterprise and disabled veteran business enterprise goals and requirements established by the authority relating to participation in the contract by small businesses. on contracts financed with nonfederal funds.
(B)The following shall apply to bidders under this paragraph:
(i)The bidder attended any presolicitation or prebid meetings that were scheduled by the authority to inform all bidders of the small business enterprise program requirements for the project for which the contract will be awarded. The authority may waive this requirement if it determines that the bidder is informed as to those program requirements.
(ii)The bidder identified and selected specific items of the project for which the contract will be awarded to be performed by small business enterprises to provide an opportunity for participation by those enterprises.
(iii)The bidder advertised, not less than 10 calendar days before the date the bids are opened, in one or more daily or weekly newspapers, trade association publications or trade-oriented publications, trade journals, or other media, specified by the authority for small business enterprises that are interested in participating in the project. This clause applies only if the authority gave public notice of the project not less than 15 calendar days prior to the date the bids are opened.
(iv)The bidder provided written notice of his or her interest in bidding on the contract to the number of small business enterprises required to be notified by the project specifications not less than 10 calendar days prior to the opening of bids. The authority shall make available to the bidder not less than 15 calendar days prior to the date the bids are opened a list or a source of lists of enterprises which are certified by the authority as small business enterprises.
(v)The bidder followed up initial solicitations of interest by contacting the enterprises to determine with certainty whether the enterprises were interested in performing specific items of the project.
(vi)The bidder provided interested small business enterprises with information about the plans, specifications, and requirements for the selected subcontracting or material supply work.
(vii)The bidder requested assistance from small business community organizations; small business contractor groups; local, state, or small business assistance offices; or other organizations that provide assistance in the recruitment and placement of small business enterprises, if any are available.
(viii)The bidder negotiated in good faith with the small business enterprises, and did not unjustifiably reject as unsatisfactory bids prepared by any small business enterprises, as determined by the authority.
(ix)Where applicable, the bidder advised and made efforts to assist interested small business enterprises in obtaining bonds, lines of credit, or insurance required by the authority or contractor.
(x)The bidders efforts to obtain small business enterprise participation could reasonably be expected by the authority to produce a level of participation sufficient to meet the goals and requirements of the authority.
(iv)In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the small business enterprise and disabled veteran business enterprise goals.
(v)Set aside work for competition among certified small business enterprises and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds three thousand dollars ($3,000) but is less than a threshold amount established by the authority, as long as price quotations are obtained by the authority from three or more certified small business enterprises.
(vi)Set aside work for competition among certified small business enterprises and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds the authoritys threshold amount in clause (v) but is less than five million dollars ($5,000,000), as long as price quotations are obtained by the authority from three or more certified small business enterprises.
(B)A small business enterprise recommended for a contract award through use of a set aside shall be performing a commercially useful function. A small business enterprise shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30 percent of the total cost of the contract work with its own workforce.
(C)Small business enterprise as used in this paragraph, means a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current small business enterprise size standards found in Part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform. The authority may establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owners personal residence.
(D)Disabled veteran business enterprise as used in this paragraph has the meaning as defined in Section 999 of the Military and Veterans Code.
(E)Goal as used in this paragraph means a numerically expressed objective that bidders are required to achieve.
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Date
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Status
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|---|---|
| Apr 25, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0. Page 4500.) |
| Aug 26, 2016 | Chaptered by Secretary of State - Chapter 204, Statutes of 2016. |
| Aug 26, 2016 | Approved by the Governor. |
| Aug 15, 2016 | Enrolled and presented to the Governor at 3:30 p.m. |
| Aug 11, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 37. Noes 0. Page 4869.). |
| Aug 11, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 11, 2016 | In Assembly. Ordered to Engrossing and Enrolling. |
| Jun 30, 2016 | Read second time. Ordered to Consent Calendar. |
| Jun 29, 2016 | From committee: Do pass. To Consent Calendar. (Ayes 10. Noes 0.) (June 28). |
| May 5, 2016 | Referred to Com. on T. & H. |
| Apr 25, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0.) |
| Feb 19, 2016 | Introduced. To print. |
| Apr 25, 2016 | Read third time. Passed. Ordered to the Senate. |
| Apr 25, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Apr 20, 2016 | Read second time. Ordered to third reading. |
| Apr 19, 2016 | From committee: Do pass. (Ayes 15. Noes 0.) (April 18). |
| Apr 13, 2016 | Re-referred to Com. on TRANS. |
| Apr 12, 2016 | Read second time and amended. |
| Apr 11, 2016 | From committee: Amend, and do pass as amended and re-refer to Com. on TRANS. (Ayes 9. Noes 0.) (April 6). |
| Mar 10, 2016 | Referred to Coms. on L. GOV. and TRANS. |
| Feb 22, 2016 | Read first time. |
| Feb 21, 2016 | From printer. May be heard in committee March 22. |
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Date
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Description
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Location
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Votes
|
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|---|---|---|---|---|
| Aug 11, 2016 | Consent Calendar 2nd AB2690 Ridley-Thomas | Senate Floor |
Passed |
|
| Jun 28, 2016 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Transportation and Housing |
Passed |
|
| Apr 25, 2016 | AB 2690 RIDLEY-THOMAS Assembly Third Reading | Assembly Floor |
Passed |
|
| Apr 18, 2016 | Do pass. | Assembly Standing Committee on Transportation |
Passed |
|
| Apr 6, 2016 | Do pass as amended and be re-referred to the Committee on [Transportation] | Assembly Standing Committee on Local Government |
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
|
|---|---|---|
| Los Angeles County Metropolitan Transportation Authority | ** Support | Apr 18, 2016 |
| Los Angeles County Metropolitan Transportation Authority [SPONSOR] | ** Support | Apr 18, 2016 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
CONSENT
Bill No: AB 2690
:
SENATE TRANS. & HOUSING COMMITTEE: 10-0, 6/28/16
AYES: Beall, Cannella, Allen, Bates, Gaines, Leyva, McGuire, Mendoza, Roth, Wieckowski
NO VOTE RECORDED: Galgiani
ASSEMBLY FLOOR: 77-0, 4/25/16 - See last page for vote
SOURCE: Los Angeles County Metropolitan Transportation Authority
DIGEST: This bill allows the Los Angeles County Metropolitan Transportation Authority (METRO) to facilitate contract awards with disabled veteran business enterprises (DVBEs), and makes a number of changes to METRO’s existing authority to facilitate contract awards with small business enterprises (SBEs).
Existing law:
- Allows METRO, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, to do any of the following in facilitating contract awards to small businesses:
- Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference shall be 5% of the lowest responsible bidder meeting specifications that provide for small business participation.
- Establish a subcontracting participation goal for small businesses on contracts financed with non-federal funds and grant a preference of 5% to the lowest responsible bidders who meet the goal.
- Require bidders to make a good faith effort, in accordance with the criteria established in the parameters specified below, prior to the time bids are opened, to comply with the goals and requirements established by METRO relating to participation in the contract by small businesses.
- Sets forth parameters by which bidders can demonstrate good faith efforts to achieve SBE goals.
- Defines “small business enterprise” to mean a business enterprise that is classified as a small business under United States Small Business Administration rules, as specified.
- Allows METRO to establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owner’s personal residence.
- Allows, pursuant to the Small Business and Procurement and Contract Act, state agencies to award contracts for goods, services, or information technology to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000.
- Quotes are obtained from two or more SBEs or from two or more DVBEs.
- Allows state agencies to award contracts for construction to a certified small business or a DVBE without complying with formal advertising and bidding requirements if specific conditions are met.
This bill:
- Allows METRO to facilitate contract awards with DVBEs, except for contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, as specified.
- Replaces provisions allowing METRO to require bidders to make a good faith effort to comply with SBE goals and requirements prior to bid opening with provisions that require bidders to comply with the SBE and DVBE goals and requirements prior to bid opening.
- Allows METRO to award contracts to the lowest responsible bidder meeting the SBE and DVBE goals.
- Allows METRO to set aside work for competition among certified SBEs and to award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $5,000 but is less than $3 million, as long as price quotations are obtained by METRO from three or more certified SBEs; requires METRO to report to the Legislature regarding contracts awarded under this authority.
- Requires an SBE recommended for a contract award through the use of a set-aside to be performing a commercially useful function. An SBE shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30% of the total cost of the contract work with its own workforce.
- Deletes a number of provisions related to how a bidder would demonstrate good faith efforts to meet SBE goals.
Background
AB 1341 (Price, Chapter 494, Statutes of 2010) authorized METRO to facilitate contract awards to small businesses on contracts over $100,000. AB 2440 (Lowenthal, Chapter 703, Statutes of 2012) eliminated the $100,000 limitation on METRO’s authority to facilitate contract awards to small businesses. In facilitating SBE contracts, METRO may provide a bid preference of 5% to the lowest responsible bidder. METRO can also establish a subcontracting participation goal for SBEs on certain contracts financed with nonfederal funds and give a preference of 5% to the lowest responsible bidders that meet that goal. METRO currently has no authorization to facilitate contract awards to DVBEs, or to use small business set-asides.
Various state and local programs. California has had a small business preference within the state’s procurement process for more than 30 years, and a DVBE component for more than 15 years. Some cities have programs that grant preference to local or regional small businesses. These may be in lieu of or in addition to preferences for small businesses in general. These current programs are governed by a combination of state law and city charter provisions. Furthermore, local transportation agencies such as the Riverside County Transportation Commission, the Orange County Transportation Authority, and the San Bernardino Associated Governments have similar programs for disadvantaged businesses. Ultimately, these programs assist various types of businesses win government contracts by “setting aside” specific government purchases exclusively for participation by these particular types of businesses. It is important to note that the contracts are still competitive; however, the competition is narrowed.
This bill improves METRO’s efforts to contract with SBEs and DVBEs by providing the authority to facilitate contracting with both SBEs and DVBEs, in addition to expanding the existing 5% bid preference for SBEs to DVBEs. Furthermore, bidders will now be required to meet, rather than make a good faith effort to meet, SBE and DVBE goals, which will allow METRO to award contracts to the bidder who meets these SBE and DVBE goals; in turn providing economic growth for these particular industries. Lastly, this bill substantially increases the SBE bid threshold to require METRO to obtain three bids for projects greater than $5,000 but less than $3 million to encourage participation. In order to determine the effectiveness of these changes to METRO’s SBE and DVBE programs, this bill additionally requires METRO to report to the Legislature on the contracts awarded under the provisions specified in this bill.
Comments
Purpose. The author notes, “LA METRO is the largest transportation agency in the state, issuing approximately $2 to $5 billion in contracts annually. Under existing law, contractors voluntarily opt-in to the current SBE preference program. While the current SBE preference program has aided METRO in increasing SBE participation, requiring bidders to meet a specific SBE subcontracting goal on contracts would substantially increase SBE participation rates. As for DBVE participation, existing law does not allow LA METRO to use goals or preferences on those contracts.”
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Los Angeles County Metropolitan Transportation Authority (source)
Hispanic Engineers Business Corporation
Redwood Resources
T&T Public Relations
None received
ASSEMBLY FLOOR: 77-0, 4/25/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Wood, Rendon
NO VOTE RECORDED: Chang, Olsen, Williams
7/29/16 10:43:32
**** END ****
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 2690 Hearing Date: 6/28/2016
Author: | Ridley-Thomas | ||
Version: | 4/12/2016 | ||
Urgency: | No | Fiscal: | No |
Consultant: | Manny Leon | ||
SUBJECT: Los Angeles County METROpolitan Transportation Authority: contracting
DIGEST: This bill allows the Los Angeles County METROpolitan Transportation Authority (METRO) to facilitate contract awards with disabled veteran business enterprises (DVBEs), and makes a number of changes to METRO’s existing authority to facilitate contract awards with small business enterprises (SBEs).
ANALYSIS:
Existing law:
- Allows METRO, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, to do any of the following in facilitating contract awards to small businesses:
- Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference shall be 5% of the lowest responsible bidder meeting specifications that provide for small business participation.
- Establish a subcontracting participation goal for small businesses on contracts financed with non-federal funds and grant a preference of 5% to the lowest responsible bidders who meet the goal.
- Require bidders to make a good faith effort, in accordance with the criteria established in the parameters specified below, prior to the time bids are opened, to comply with the goals and requirements established by METRO relating to participation in the contract by small businesses.
- Sets forth parameters by which bidders can demonstrate good faith efforts to achieve SBE goals.
- Defines “small business enterprise” to mean a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current SBE size standards found in part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform.
- Allows METRO to establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owner’s personal residence.
- Allows, pursuant to the Small Business and Procurement and Contract Act, state agencies to award contracts for goods, services, or information technology to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000
- Quotes are obtained from two or more SBEs or from two or more DVBEs
- Allows state agencies to award contracts for construction to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000, as specified
- Quotes are obtained from two or more SBEs or from two or more DVBEs
This bill:
- Allows METRO to facilitate contract awards with DVBEs, except for contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, as specified.
- Replaces provisions allowing METRO to require bidders to make a good faith effort to comply with SBE goals and requirements prior to bid opening with provisions that require bidders to comply with the SBE and DVBE goals and requirements prior to bid opening.
- Allows METRO to award contracts to the lowest responsible bidder meeting the SBE and DVBE goals.
- Allows METRO to set aside work for competition among certified SBEs and to award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $5,000 but is less than $3 million, as long as price quotations are obtained by METRO from three or more certified SBEs; requires METRO to report to the Legislature regarding contracts awarded under this authority.
- Requires an SBE recommended for a contract award through the use of a set-aside to be performing a commercially useful function. An SBE shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30% of the total cost of the contract work with its own workforce.
- Defines “disabled veteran business enterprise” to have the meaning as defined in California’s DVBE program pursuant to the Military and Veterans Code.
- Defines “goal” as used in the statutes governing METRO’s authority to facilitate contract awards with SBEs and DVBEs to mean a numerically expressed objective that bidders are required to achieve.
- Deletes a number of provisions related to how a bidder would demonstrate good faith efforts to meet SBE goals.
COMMENTS:
- Purpose. The author notes, “LA METRO is the largest transportation agency in the state, issuing approximately $2 to $5 billion in contracts annually. Under existing law, contractors voluntarily opt-in to the current SBE preference program. While the current SBE preference program has aided METRO in increasing SBE participation, requiring bidders to meet a specific SBE subcontracting goal on contracts would substantially increase SBE participation rates. As for DBVE participation, existing law does not allow LA METRO to use goals or preferences on those contracts.”
- Background. AB 1341 (Price, Chapter 494, Statutes of 2010) authorized METRO to facilitate contract awards to small businesses on contracts over $100,000. AB 2440 (Lowenthal, Chapter 703, Statutes of 2012) eliminated the $100,000 limitation on METRO’s authority to facilitate contract awards to small businesses. In facilitating SBE contracts, METRO may provide a bid preference of 5% to the lowest responsible bidder. METRO can also establish a subcontracting participation goal for SBEs on certain contracts financed with nonfederal funds and give a preference of 5% to the lowest responsible bidders that meet that goal. METRO currently has no authorization to facilitate contract awards to DVBEs, or to use small business set-asides.
- Various state and local programs. California has had a small business preference within the state’s procurement process for more than 30 years, and a DVBE component for more than 15 years. Some cities have programs that grant preference to local or regional small businesses. These may be in lieu of or in addition to preferences for small businesses in general. These current programs are governed by a combination of state law and city charter provisions. Furthermore, local transportation agencies such as the Riverside County Transportation Commission, the Orange County Transportation Authority, and the San Bernardino Associated Governments have similar programs for disadvantage businesses. Ultimately, these programs assist various types of businesses win government contracts by “setting aside” specific government purchases exclusively for participation by these particular types of businesses. It is important to note that the contracts are still competitive; however, the competition is narrowed.
This bill improves METRO’s efforts to contract with SBEs and DVBEs by providing the authority to facilitate contracting with both SBEs and DVBEs, in addition to expanding the existing 5% bid preference for SBEs to DVBEs. Furthermore, bidders will now be required to meet, rather than make a good faith effort to meet, SBE and DVBE goals, which will allow METRO to award contracts to the bidder who meets these SBE and DVBE goals; in turn providing economic growth for these particular industries. Lastly, this bill substantially increases the SBE bid threshold to require METRO to obtain three bids for projects greater than $5,000 but less than $3 million to encourage participation. In order to determine the effectiveness of these changes to METRO’s SBE and DVBE programs, this bill additionally requires METRO to report to the Legislature on the contracts awarded under the provisions specified in this bill.
Assembly Votes:
Floor: 77-0
Trans: 15-0
LGov: 9-0
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
POSITIONS: (Communicated to the committee before noon on Wednesday,
June 22, 2016.)
SUPPORT:
Los Angeles County Metropolitan Transportation Authority (Sponsor)
Hispanic Engineers Business Corporation
Redwood Resources
T&T Public Relations
OPPOSITION:
None received
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 2690
Author:(Ridley-Thomas)
As Amended Ver:April 12, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Local Government | 9-0 | Eggman, Waldron, Mullin, Bonilla, Chiu, Cooley, Beth Gaines, Gordon, Linder | |
Transportation | 15-0 | Frazier, Linder, Baker, Bloom, Brown, Chu, Daly, Dodd, Gomez, Kim, Mathis, Medina, Melendez, Nazarian, O'Donnell |
SUMMARY: Allows the Los Angeles County Metropolitan Transportation Authority (Metro) to facilitate contract awards with disabled veteran business enterprises, and makes a number of changes to Metro's existing authority to facilitate contract awards with small business enterprises. Specifically, this bill:
- Allows Metro to facilitate contract awards with disabled veteran business enterprises (DVBEs), except for contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, as specified.
- Deletes a provision that allows Metro to require bidders, prior to the time bids are opened, to make a good faith effort to comply with small business enterprise (SBE) goals and requirements established by Metro.
- Allows Metro, in facilitating contract awards with SBEs and DVBEs, to do any of the following:
- Require bidders, prior to the time bids are opened, to comply with the SBE and DVBE goals and requirements established by Metro on contracts financed with nonfederal funds;
- In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the SBE and DVBE goals;
- Set aside work for competition among certified SBEs and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $5,000, but is less than $3 million, as long as price quotations are obtained by Metro from three or more certified SBEs.
- Requires Metro, for the purposes of legislative oversight, to prepare and submit a report to the Legislature by December 31, 2017, regarding contracts awarded, if Metro awards contracts pursuant to 3) c) above.
- Requires a SBE recommended for a contract award through use of a set aside to be performing a commercially useful function. An SBE shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30% of the total cost of the contract work with its own workforce.
- Deletes a number of requirements that apply to bidders pursuant to Metro's existing authority to facilitate contract awards to SBEs.
- Defines "disabled veteran business enterprise" to have the meaning as defined in California's DVBE Program pursuant to the Military and Veterans Code.
- Defines "goal" as used in the statutes governing Metro's authority to facilitate contract awards with SBEs and DVBEs to mean a numerically expressed objective that bidders are required to achieve.
EXISTING LAW:
- Allows Metro, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, to do any of the following in facilitating contract awards to small businesses:
- Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference shall be 5% of the lowest responsible bidder meeting specifications that provide for small business participation;
- Establish a subcontracting participation goal for small businesses on contracts financed with nonfederal funds and grant a preference of 5% to the lowest responsible bidders who meet the goal; and,
- Require bidders to make a good faith effort, in accordance with the criteria established in 2) below, prior to the time bids are opened, to comply with the goals and requirements established by Metro relating to participation in the contract by small businesses.
- Provides that the following shall apply to bidders under the above provisions:
- The bidder attended any pre-solicitation or pre-bid meetings that were scheduled by Metro to inform all bidders of the SBE program requirements for the project for which the contract will be awarded. Metro may waive this requirement if it determines that the bidder is informed as to those program requirements;
- The bidder identified and selected specific items of the project for which the contract will be awarded to be performed by SBEs to provide an opportunity for participation by those enterprises;
- The bidder advertised, not less than 10 calendar days before the date the bids are opened, in one or more daily or weekly newspapers, trade association publications or trade-oriented publications, trade journals, or other media, specified by Metro for SBEs that are interested in participation in the project. This only applies if Metro gave public notice of the project not less than 15 calendar days prior to the date the bids are opened;
- The bidder provided written notice of his or her interest in bidding on the contract to the number of SBEs required to be notified by the project specifications not less than 10 calendar days prior to the opening of bids. Metro shall make available to the bidder not less than 15 calendar days prior to the date the bids are opened a list or source of lists of enterprises which are certified by Metro as SBEs;
- The bidder followed up initial solicitations of interest by contacting the enterprises to determine with certainty whether the enterprises were interested in performing specific items of the project;
- The bidder provided interested SBEs with information about the plans, specifications, and requirements for the selected subcontracting or material supply work;
- The bidder requested assistance from small business community organizations; small business contractor groups; local, state, or small business assistance offices; or, other organizations that provide assistance in the recruitment and placement of SBEs, if any are available;
- The bidder negotiated in good faith with the SBEs, and did not unjustifiably reject as unsatisfactory bids prepared by any SBEs, as determined by Metro;
- Where applicable, the bidder advised and made efforts to assist interested SBEs in obtaining bonds, lines of credit, or insurance required by Metro or contractor; and,
- The bidder's efforts to obtain SBE participation could reasonably be expected by Metro to produce a level of participation sufficient to meet the goals and requirements of Metro.
- Defines "small business enterprise" to mean a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current SBE size standards found in part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform.
- Allows Metro to establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owner's personal residence.
- Allows, pursuant to the Small Business Procurement and Contract Act (Act), state agencies to award contracts for goods, services, or information technology to a certified small business or a DVBE without complying with formal advertising and bidding requirements, if the following conditions are met: a) The contract award is greater than $5,000 and less than $250,000; and, b) Quotes are obtained from two or more SBs or from two or more DVBEs.
- Allows state agencies to award contracts for construction to a certified small business or a DVBE without complying with formal advertising and bidding requirements, if the following conditions are met: a) The contract award is greater than $5,000 and less than $250,000, as specified; and, b) Quotes are obtained from two or more SBs or from two or more DVBEs.
FISCAL EFFECT: None
COMMENTS:
- Bill Summary. This bill makes a number of changes to Metro's contracting authority. First, it allows Metro to facilitate contract awards with DVBEs. It eliminates Metro's authority to require bidders to make a good faith effort to comply with SBE goals, and instead, allows Metro to do the following in facilitating contract awards with SBEs and DVBEs:
- Require bidders, prior to the time bids are opened, to comply with the SBE and DVBE goals and requirements established by Metro on contracts financed with nonfederal funds;
- In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the SBE and DVBE goals; and,
- Set aside work for competition among certified SBEs and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $5,000, but is less than $3 million, as long as price quotations are obtained by Metro from three or more certified SBEs.
If Metro exercises the authority granted in c) above, it must prepare and submit a report to the Legislature by December 31, 2017, regarding contracts awarded, for the purposes of legislative oversight.
This bill requires an SBE recommended for a contract award through use of a set aside to be performing a commercially useful function, which the bill defines an SBE that performs and exercises responsibility for at least 30% of the total cost of the contract work with its own workforce. This bill also defines "goal," as that term is used for purposes of Metro's SBE and DVBE contracting, to mean a numerically expressed objective that bidders must achieve.
This bill is sponsored by Metro.
- Author's Statement. According to the author, "LA Metro is the largest transportation agency in the state, issuing approximately $2 to $5 billion in contracts annually.
"Under existing law, contractors voluntarily opt-in to the current Small Business Enterprise (SBE) preference program. While the current SBE preference program has aided Metro in increasing SBE participation, requiring bidders to meet a specific SBE subcontracting goal on contracts would substantially increase SBE participation rates. As for Disadvantaged Veteran Business Enterprise (DBVE) participation, existing law does not allow LA Metro to use goals or preferences on those contracts.
"Small businesses are the engine of economic growth and job creation in this state. Allowing LA Metro to use a range of tools to increase opportunities for small businesses will create multipliers in the local economy and bring opportunities to underserved communities."
- Background. SB 1341 (Price), Chapter 494, Statutes of 2010, authorized Metro to facilitate contract awards to small businesses on contracts over $100,000. AB 2440 (Lowenthal), Chapter 703, Statutes of 2012, eliminated the $100,000 limitation on Metro's authority to facilitate contract awards to small businesses. In facilitating SBE contracts, Metro may provide a bid preference of 5% to the lowest responsible bidder. Metro can also establish a subcontracting participation goal for SBEs on certain contracts financed with nonfederal funds and give a preference of 5% to the lowest responsible bidders that meet that goal. Metro currently has no authorization to facilitate contract awards to DVBEs, or to use small business set-asides.
Small business set-asides help small businesses win government contracts by "setting aside" specific government purchases exclusively for participation by small business concerns. The contracts are still competitive, but the competition is narrowed to small businesses only.
California has had a small business preference within the state's procurement process for more than 30 years, and a DVBE component for more than 15 years. Some cities have programs that grant preference to local or regional small businesses. These may be in lieu of or in addition to preferences for small businesses in general. These current programs are governed by a combination of state law and city charter provisions.
This bill significantly strengthens Metro's authority to facilitate contracting with SBEs and DVBEs, in addition to expanding the existing 5% bid preference for SBEs to DVBEs. Bidders will now be required to meet (rather than make a good faith effort to meet) SBE and DVBE goals, and these goals will now carry a numerically expressed objective that bidders must achieve. In awarding contracts to the lowest responsible bidder, Metro will now be allowed to award the contract to the lowest responsible bidder who meets the SBE and DVBE goals.
Metro will also be able to set aside contracts costing between $5,000 and $3 million for competition by certified SBEs, as long as Metro obtains quotes from three or more certified SBEs. These SBEs must perform and exercise responsibility for at least 30% of the total cost of the contract work with their own workforce.
- Previous Legislation. AB 2440 (Lowenthal), Chapter 703, Statutes of 2012, eliminated the $100,000 limitation on Metro's authority to facilitate contract awards to small businesses.
SB 1341 (Price), Chapter 494, Statutes of 2010, authorized Metro to facilitate contract awards to small businesses on contracts over $100,000.
- Arguments in Support. The Los Angeles County Metropolitan Transportation Authority, sponsor of this bill, states, "Small business set-asides allow for small business to bid as primes, fostering opportunities to grow and continue to build capacity. This bill will allow Metro to utilize a range of tools to further promote and facilitate increased participation of SBEs and DVBEs in public contracting with Metro."
- Arguments in Opposition. None on file.
Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0002759
Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
ABPCA Bill Id:AB 2690 (
Author:Ridley-Thomas) – As Amended Ver:April 12, 2016
SUBJECT: Los Angeles County Metropolitan Transportation Authority: contracting
SUMMARY: Allows the Los Angeles County Metropolitan Transportation Authority (Metro) to facilitate contract awards with disabled veteran business enterprises (DVBEs), and makes a number of changes to Metro's existing authority to facilitate contract awards with small business enterprises (SBEs). Specifically, this bill:
- Allows Metro to facilitate contract awards with DVBEs, except for contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, as specified.
- Replaces provisions allowing Metro to require bidders to make a good faith effort to comply with SBE goals and requirements prior to bid opening with provisions that require bidders to comply with the SBE and DVBE goals and requirements prior to bid opening.
- Allows Metro to award contracts to the lowest responsible bidder meeting the SBE and DVBE goals.
- Allows Metro to set aside work for competition among certified SBEs and to award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $5,000 but is less than $3 million, as long as price quotations are obtained by Metro from three or more certified SBEs; requires Metro to report to the Legislature regarding contracts awarded under this authority.
- Requires an SBE recommended for a contract award through the use of a set aside to be performing a commercially useful function. An SBE shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30% of the total cost of the contract work with its own workforce.
- Defines "disabled veteran business enterprise” to have the meaning as defined in California's DVBE program pursuant to the Military and Veterans Code.
- Defines “goal” as used in the statutes governing Metro's authority to facilitate contract awards with SBEs and DVBEs to mean a numerically expressed objective that bidders are required to achieve.
- Deletes a number of provisions related to how a bidder would demonstrate good faith efforts to meet SBE goals.
EXISTING LAW:
- Allows Metro, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, to do any of the following in facilitating contract awards to small businesses:
- Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference shall be 5% of the lowest responsible bidder meeting specifications that provide for small business participation;
- Establish a subcontracting participation goal for small businesses on contracts financed with non-federal funds and grant a preference of 5% to the lowest responsible bidders who meet the goal; and,
- Require bidders to make a good faith effort, in accordance with the criteria established in 2), below, prior to the time bids are opened, to comply with the goals and requirements established by Metro relating to participation in the contract by small businesses.
- Sets forth parameters by which bidders can demonstrate good faith efforts to achieve SBE goals.
- Defines “small business enterprise” to mean a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current SBE size standards found in part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform.
- Allows Metro to establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owner’s personal residence.
- Allows, pursuant to the Small Business and Procurement and Contract Act, state agencies to award contracts for goods, services, or information technology to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000; and,
- Quotes are obtained from two or more SBEs or from two or more DVBEs.
- Allows state agencies to award contracts for construction to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000, as specified; and,
- Quotes are obtained from two or more SBEs or from two or more DVBEs.
FISCAL EFFECT: Unknown, this bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS: AB 2690 is intended to allow Metro to utilize a range of tools to further promote and facilitate increased participation of SBEs and DVBEs in its contracting. The agency lets between $2 billion and $5 billion in contracts annually. The small business set-asides provided for in this bill will allow for small business to bid as prime contractors and foster opportunities to grow and continue to build capacity.
According to the author, "LA Metro is the largest transportation agency in the state, issuing approximately $2 to $5 billion in contracts annually. Under existing law, contractors voluntarily opt-in to the current Small Business Enterprise (SBE) preference program. While the current SBE preference program has aided Metro in increasing SBE participation, requiring bidders to meet a specific SBE subcontracting goal on contracts would substantially increase SBE participation rates. As for Disadvantaged Veteran Business Enterprise (DBVE) participation, existing law does not allow LA Metro to use goals or preferences on those contracts.
"Small businesses are the engine of economic growth and job creation in this state. Allowing LA Metro to use a range of tools to increase opportunities for small businesses will create multipliers in the local economy and bring opportunities to underserved communities."
California has had a small business preference within the state’s procurement process for more than 30 years, and a DVBE component for more than 15 years. Some cities have programs that grant preference to local or regional small businesses. These may be in lieu of or in addition to preferences for small businesses in general. These current programs are governed by a combination of state law and city charter provisions.
This bill significantly strengthens Metro's authority to facilitate contracting with SBEs and DVBEs, in addition to expanding the existing 5% bid preference for SBEs to DVBEs. Bidders will now be required to meet (rather than make a good faith effort to meet) SBE and DVBE goals and these goals will now carry a numerically expressed objective that bidders must achieve. In awarding contracts to the lowest responsible bidder, Metro will now be allowed to award the contract to the lowest responsible bidder who meets the SBE and DVBE goals.
Metro will also be able to set aside contracts for competition by certified SBEs, as long as Metro obtains quotes from three or more certified SBEs. These SBEs must perform and exercise responsibility for at least 30% of the total cost of the contract work with their own workforce.
Double referral. This bill passed out of the Assembly Local Government Committee on April 6, 2016, on a vote of 9–0.
Previous legislation: AB 2440 (Lowenthal), Chapter 703, Statutes of 2012, eliminated the $100,000 limitation on Metro's authority to facilitate contract awards to small businesses.
AB 1341 (Price), Chapter 494, Statutes of 2010, authorized Metro to facilitate contract awards to small businesses on contracts over $100,000.
REGISTERED SUPPORT / OPPOSITION:
Support
Los Angeles County Metropolitan Transportation Authority (Sponsor)
Opposition
None on file
Analysis Prepared by: Janet Dawson / TRANS. / (916) 319-2093
Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
ABPCA Bill Id:AB 2690 (
Author:Ridley-Thomas) – As Introduced Ver:February 19, 2016
SUBJECT: Los Angeles County Metropolitan Transportation Authority: contracting.
SUMMARY: Allows the Los Angeles County Metropolitan Transportation Authority (Metro) to facilitate contract awards with disabled veteran business enterprises, and makes a number of changes to Metro's existing authority to facilitate contract awards with small business enterprises. Specifically, this bill:
- Allows Metro to facilitate contract awards with disabled veteran business enterprises (DVBEs), except for contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, as specified.
- Deletes a provision that allows Metro to require bidders, prior to the time bids are opened, to make a good faith effort to comply with small business enterprise (SBE) goals and requirements established by Metro.
- Allows Metro, in facilitating contract awards with SBEs and DVBEs, to do any of the following:
- Require bidders, prior to the time bids are opened, to comply with the SBE and DVBE goals and requirements established by Metro on contracts financed with nonfederal funds;
- In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the SBE and DVBE goals;
- Set aside work for competition among certified SBEs and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $3,000, but is less than a threshold amount established by Metro, as long as price quotations are obtained by Metro from three or more certified SBEs; and,
- Set aside work for competition among certified SBEs and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds Metro's threshold amount in c), above, but is less than $5 million, as long as price quotations are obtained by Metro from three or more certified SBEs.
- Requires a SBE recommended for a contract award through use of a set aside to be performing a commercially useful function. An SBE shall be presumed to be performing a commercially useful function if it performs and exercises responsibility of at least 30% of the total cost of the contract work with its own workforce.
- Deletes a number of requirements that apply to bidders pursuant to Metro's existing authority to facilitate contract awards to SBEs.
- Defines "disabled veteran business enterprise” to have the meaning as defined in California's DVBE Program pursuant to the Military and Veterans Code.
- Defines “goal” as used in the statutes governing Metro's authority to facilitate contract awards with SBEs and DVBEs to mean a numerically expressed objective that bidders are required to achieve.
EXISTING LAW:
- Allows Metro, except as to contracts for professional services involving private architectural, landscape architectural, engineering, environmental, land surveying, or construction management, to do any of the following in facilitating contract awards to small businesses:
- Provide for a small business preference in construction, the construction component of a design-build team, the procurement of goods, or the delivery of services. The preference shall be 5% of the lowest responsible bidder meeting specifications that provide for small business participation;
- Establish a subcontracting participation goal for small businesses on contracts financed with nonfederal funds and grant a preference of 5% to the lowest responsible bidders who meet the goal; and,
- Require bidders to make a good faith effort, in accordance with the criteria established in 2), below, prior to the time bids are opened, to comply with the goals and requirements established by Metro relating to participation in the contract by small businesses.
- Provides that the following shall apply to bidders under the above provisions:
- The bidder attended any presolicitation or prebid meetings that were scheduled by Metro to inform all bidders of the SBE program requirements for the project for which the contract will be awarded. Metro may waive this requirement if it determines that the bidder is informed as to those program requirements;
- The bidder identified and selected specific items of the project for which the contract will be awarded to be performed by SBEs to provide an opportunity for participation by those enterprises;
- The bidder advertised, not less than 10 calendar days before the date the bids are opened, in one or more daily or weekly newspapers, trade association publications or trade-oriented publications, trade journals, or other media, specified by Metro for SBEs that are interested in participation in the project. This only applies if Metro gave public notice of the project not less than 15 calendar days prior to the date the bids are opened;
- The bidder provided written notice of his or her interest in bidding on the contract to the number of SBEs required to be notified by the project specifications not less than 10 calendar days prior to the opening of bids. Metro shall make available to the bidder not less than 15 calendar days prior to the date the bids are opened a list or source of lists of enterprises which are certified by Metro as SBEs;
- The bidder followed up initial solicitations of interest by contacting the enterprises to determine with certainty whether the enterprises were interested in performing specific items of the project;
- The bidder provided interested SBEs with information about the plans, specifications, and requirements for the selected subcontracting or material supply work;
- The bidder requested assistance from small business community organizations; small business contractor groups; local, state, or small business assistance offices; or, other organizations that provide assistance in the recruitment and placement of SBEs, if any are available;
- The bidder negotiated in good faith with the SBEs, and did not unjustifiably reject as unsatisfactory bids prepared by any SBEs, as determined by Metro;
- Where applicable, the bidder advised and made efforts to assist interested SBEs in obtaining bonds, lines of credit, or insurance required by Metro or contractor; and,
- The bidder’s efforts to obtain SBE participation could reasonably be expected by Metro to produce a level of participation sufficient to meet the goals and requirements of Metro.
- Defines “small business enterprise” to mean a business enterprise that is classified as a small business under United States Small Business Administration rules and meets the current SBE size standards found in part 121 of Title 13 of the Code of Federal Regulations appropriate to the type of work the enterprise seeks to perform.
- Allows Metro to establish limitations regarding the average annual gross receipts of a small business over the previous three fiscal years and establish limitations regarding the personal net worth of the owner of the small business, exclusive of the value of the owner’s personal residence.
- Allows, pursuant to the Small Business and Procurement and Contract Act (Act), state agencies to award contracts for goods, services, or information technology to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000; and,
- Quotes are obtained from two or more SBs or from two or more DVBEs.
- Allows state agencies to award contracts for construction to a certified small business or a DVBE without complying with formal advertising and bidding requirements if the following conditions are met:
- The contract award is greater than $5,000 and less than $250,000, as specified; and,
- Quotes are obtained from two or more SBs or from two or more DVBEs.
FISCAL EFFECT: None
COMMENTS:
- Bill Summary. This bill makes a number of changes to Metro's contracting authority. First, it allows Metro to facilitate contract awards with DVBEs. It eliminates Metro's authority to require bidders to make a good faith effort to comply with SBE goals, and instead, allows Metro to do the following in facilitating contract awards with SBEs and DVBEs:
- Require bidders, prior to the time bids are opened, to comply with the SBE and DVBE goals and requirements established by Metro on contracts financed with nonfederal funds;
- In awarding contracts to the lowest responsible bidder, award the contract to the lowest responsible bidder meeting the SBE and DVBE goals;
- Set aside work for competition among certified SBEs and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds $3,000, but is less than a threshold amount established by Metro, as long as price quotations are obtained by Metro from three or more certified SBEs; and,
- Set aside work for competition among certified SBEs and award a contract to the lowest responsible bidder whenever the expected expenditure required exceeds Metro's threshold amount in c), above, but is less than $5 million, as long as price quotations are obtained by Metro from three or more certified SBEs.
The bill requires an SBE recommended for a contract award through use of a set aside to be performing a commercially useful function, which the bill defines an SBE that performs and exercises responsibility for at least 30% of the total cost of the contract work with its own workforce. The bill also defines "goal," as that term is used for purposes of Metro's SBE and DVBE contracting, to mean a numerically expressed objective that bidders must achieve.
This bill is sponsored by Metro.
- Author's Statement. According to the author, "LA Metro is the largest transportation agency in the state, issuing approximately $2 to $5 billion in contracts annually.
"Under existing law, contractors voluntarily opt-in to the current Small Business Enterprise (SBE) preference program. While the current SBE preference program has aided Metro in increasing SBE participation, requiring bidders to meet a specific SBE subcontracting goal on contracts would substantially increase SBE participation rates. As for Disadvantaged Veteran Business Enterprise (DBVE) participation, existing law does not allow LA Metro to use goals or preferences on those contracts.
"Small businesses are the engine of economic growth and job creation in this state. Allowing LA Metro to use a range of tools to increase opportunities for small businesses will create multipliers in the local economy and bring opportunities to underserved communities."
- Background. AB 1341 (Price), Chapter 494, Statutes of 2010, authorized Metro to facilitate contract awards to small businesses on contracts over $100,000. AB 2440 (Lowenthal), Chapter 703, Statutes of 2012, eliminated the $100,000 limitation on Metro's authority to facilitate contract awards to small businesses. In facilitating SBE contracts, Metro may provide a bid preference of 5% to the lowest responsible bidder. Metro can also establish a subcontracting participation goal for SBEs on certain contracts financed with nonfederal funds and give a preference of 5% to the lowest responsible bidders that meet that goal. Metro currently has no authorization to facilitate contract awards to DVBEs, or to use small business set-asides.
Small business set-asides help small businesses win government contracts by "setting aside" specific government purchases exclusively for participation by small business concerns. The contracts are still competitive, but the competition is narrowed to small businesses only.
California has had a small business preference within the state’s procurement process for more than 30 years, and a DVBE component for more than 15 years. Some cities have programs that grant preference to local or regional small businesses. These may be in lieu
of or in addition to preferences for small businesses in general. These current programs are governed by a combination of state law and city charter provisions.
This bill significantly strengthens Metro's authority to facilitate contracting with SBEs and DVBEs, in addition to expanding the existing 5% bid preference for SBEs to DVBEs. Bidders will now be required to meet (rather than make a good faith effort to meet) SBE and DVBE goals, and these goals will now carry a numerically expressed objective that bidders must achieve. In awarding contracts to the lowest responsible bidder, Metro will now be allowed to award the contract to the lowest responsible bidder who meets the SBE and DVBE goals.
Metro will also be able to set aside contracts for competition by certified SBEs, as long as Metro obtains quotes from three or more certified SBEs. These SBEs must perform and exercise responsibility for at least 30% of the total cost of the contract work with their own workforce.
- Suggested Amendment. The Committee may wish to consider the following amendment:
This bill allows small business set-asides under two categories:
- When the expected expenditure exceeds $3,000, but is less than a threshold amount established by Metro; and,
- When the expected expenditure exceeds a threshold amount established by Metro, but is less than $5 million.
Under the Act, which applies to state agencies, the thresholds for SBE set-asides are between $5,000 and $250,000. While the Act's provisions require only two price quotes, and this bill would require three, the Committee may wish to amend this bill to allow small business set-asides when the expected expenditure exceeds $5,000 but is less than $250,000.
- Previous Legislation. AB 2440 (Lowenthal), Chapter 703, Statutes of 2012, eliminated the $100,000 limitation on Metro's authority to facilitate contract awards to small businesses.
AB 1341 (Price), Chapter 494, Statutes of 2010, authorized Metro to facilitate contract awards to small businesses on contracts over $100,000.
- Arguments in Support. The Los Angeles County Metropolitan Transportation Authority, sponsor of this bill, states, "Small business set-asides allow for small business to bid as primes, fostering opportunities to grow and continue to build capacity. This bill will allow Metro to utilize a range of tools to further promote and facilitate increased participation of SBEs and DVBEs in public contracting with Metro."
- Arguments in Opposition. None on file.
- Double-Referral. This bill is double-referred to the Transportation Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Los Angeles County Metropolitan Transportation Authority [SPONSOR]
Opposition
None on file
Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958
Discussed in Hearing
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