Existing law requires the governing board of any school district to let contracts for the purchase of equipment, materials, or supplies to be furnished, leased, or sold to the district, services other than construction services, and certain repairs, involving an expenditure of more than $50,000, and to let contracts for public projects, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder who gives security as the governing board requires.

Existing law authorizes personal services contracting by school districts when specified conditions are met.

This bill, until January 1, 2024, would establish a pilot project in which the governing board of the Los Angeles Unified School District would be authorized to award multiple annual task order procurement contracts, not exceeding $3,000,000 each, for purposes that include, but are not limited to, services, repairs including maintenance, and construction, as described above, that are paid for with moneys from the school districts general fund. The bill would require the contracts to be awarded to the lowest responsible bidder and to be based primarily on plans and specifications for typical work. The bill would require the school district, before entering into a contract under these provisions, to ensure that it is in compliance with the above-described provisions authorizing personal services contracting by school districts when specified conditions are met. The bill would authorize task order procurement contracts to only be awarded to supplement existing personnel and would prohibit task order procurement contracts from being used to supplant existing personnel. The bill would authorize task order contracting pursuant to these provisions only if the school district has entered into a project labor agreement or agreements, as specified. The bill would require the school district, by January 15, 2023, to submit to committees of the Legislature a specified report on the use of the task order procurement method and to pay for the report. By requiring this report, this bill would impose a state-mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law requires the governing board of any school district to let contracts for the purchase of equipment, materials, or supplies to be furnished, leased, or sold to the district, services other than construction services, and certain repairs, involving an expenditure of more than $50,000, and to let contracts for public projects, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder who gives security as the governing board requires.

Existing law authorizes personal services contracting by school districts when specified conditions are met.

This bill, until January 1, 2024, would establish a pilot project in which the governing board of the Los Angeles Unified School District would be authorized to award multiple annual task order procurement contracts, not exceeding $3,000,000 each, for purposes that include, but are not limited to, services, repairs including maintenance, and construction, as described above, that are paid for with moneys from the school districts general fund. The bill would require the contracts to be awarded to the lowest responsible bidder and to be based primarily on plans and specifications for typical work. The bill would require the school district, before entering into a contract under these provisions, to ensure that it is in compliance with the above-described provisions authorizing personal services contracting by school districts when specified conditions are met. The bill would authorize task order procurement contracts to only be awarded to supplement existing personnel and would prohibit task order procurement contracts from being used to supplant existing personnel. The bill would authorize task order contracting pursuant to these provisions only if the school district has entered into a project labor agreement or agreements, as specified. The bill would require the school district, by January 15, 2023, to submit to committees of the Legislature a specified report on the use of the task order procurement method and to pay for the report. By requiring this report, this bill would impose a state-mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law requires the governing board of any school district to let contracts for the purchase of equipment, materials, or supplies to be furnished, leased, or sold to the district, services other than construction services, and certain repairs, involving an expenditure of more than $50,000, and to let contracts for public projects, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder who gives security as the governing board requires.

Existing law authorizes personal services contracting by school districts when specified conditions are met.

This bill, until January 1, 2024, would establish a pilot project in which the governing board of the Los Angeles Unified School District would be authorized to award multiple annual task order procurement contracts, not exceeding $3,000,000 each, for purposes that include, but are not limited to, services, repairs including maintenance, and construction construction, as described above. above, that are paid for with moneys from the school districts general fund. The bill would require the contracts to be awarded to the lowest responsible bidder and to be based primarily on plans and specifications for typical work. The bill would require the school district, before entering into a contract under these provisions, to ensure that it is in compliance with the above-described provisions authorizing personal services contracting by school districts when specified conditions are met. The bill would authorize task order procurement contracts to only be awarded to supplement existing personnel and would prohibit task order procurement contracts from being used to supplant existing personnel. The bill would authorize task order contracting pursuant to these provisions only if the school district has entered into a project labor agreement or agreements, as specified. The bill would require the school district, by January 15, 2023, to submit to committees of the Legislature a specified report on the use of the task order procurement method and to pay for the report. By requiring this report, this bill would impose a state-mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law, the Leroy F. Greene School Facilities Act of 1998, requires the State Allocation Board to allocate to applicant school districts, prescribed per-unhoused-pupil state funding for the construction and modernization of school facilities, including hardship funding, and supplemental funding for site development and acquisition.

Existing law, the Kindergarten Through Community College Public Education Facilities Bond Act of 2016, was approved by the voters at the November 8, 2016, statewide general election as Proposition 51, an initiative statute. The act authorized the issuance of $9,000,000,000 in general obligation bonds for new construction and the modernization of public elementary and secondary school facilities, including charter schools, and community college facilities.

This bill would state the intent of the Legislature to enact legislation that would ensure the efficiency of the school facilities program within the parameters of the Kindergarten Through Community College Public Education Facilities Bond Act of 2016.

 THIRD READING  

Bill No: AB 2488

Author:

:

Vote:

SENATE EDUCATION COMMITTEE: 7-0, 6/13/18

AYES: Allen, Wilk, Galgiani, Leyva, McGuire, Pan, Vidak

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 69-1, 5/29/18 - See last page for vote

SUBJECT:

SOURCE: Los Angeles Unified School District

DIGEST:

This bill creates a five-year pilot program to allow Los Angeles Unified School District (LAUSD) to award multiple task order procurement contracts through a single bid request for repairing and renovating school facilities.

ANALYSIS:

Existing law:

1. Requires the governing board of a school district to competitively bid and award to the lowest bidder contracts involving the following:
   1. An expenditure of $50,000 or more for the purchase of equipment, materials, or supplies, services (except for construction services), and repairs.
   2. An expenditure of $15,000 or more for a public contract project defined as construction, reconstruction, erection, alteration, renovation, improvement, demolition, repair, painting or repainting of any publicly owned, leased, or operated facility.
2. Establishes alternative methods for awarding school construction contracts, including lease-leaseback, design-build, best value, and job order contracting.
3. Authorizes contracting for services customarily performed by classified school employees only based on specified conditions.

This bill creates a five-year pilot program to allow LAUSD to award multiple task order procurement contracts through a single bid request for repairing and renovating school facilities. Specifically, this bill:

1. Authorizes the governing board of LAUSD to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds, each not exceeding $3 million, through a single request for bid.
2. Specifies that task order procurement contracts may include, but are not limited to, services, repairs, including maintenance, and construction as authorized in Public Contract Code Section (PCC) 20111 and paid for with moneys from LAUSD’s general fund. Requires the contracts to be awarded to the lowest responsible bidder, and be based primarily on plans and specifications for typical work.
3. Specifies the following parameters:
   1. Prior to entering into a contract, LAUSD shall ensure that it is in compliance with Education Code Section 45103.1.
   2. Task order procurement contracts may only be awarded to supplement existing personnel and shall not be used to supplant existing personnel.
   3. LAUSD may utilize task order procurement contracting only if it has entered into a project labor agreement or agreements that meet the requirements of PCC 2500 for all its public works projects.
4. Requires LAUSD to, no later than January 15, 2023, submit to the appropriate policy and fiscal committees of the Legislature a report on the use of the task order procurement contracting method. The report shall be prepared by an independent third party and LAUSD shall pay for the cost of the report.
5. Requires the report to include, but not be limited to, the following information:
   1. A description of the projects awarded using the task order procurement contracting method.
   2. The contract award amounts.
   3. The task order contractors awarded the projects.
   4. A description of any written protests concerning any aspect of the solicitation, bid, or award of the task order procurement contracts, including the resolution of the protests.
   5. A description of the prequalification process.
   6. If a project awarded under this article has been completed, an assessment of the project performance, including, but not limited to, a summary of any delays or cost increases.
6. Specifies that the task order procurement contracting method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of LAUSD to let a contract for a project to the lowest responsible bidder or else reject all bids.
7. Sunsets on January 1, 2024.

Comments

1. Need for the bill. According to the author, “While the Public Contract Code sets the terms and structure for awarding public works contracts, the needs in the field cannot always be anticipated. Throughout the school year, it is inevitable that a school district will receive more service requests than existing maintenance personnel can reasonably process in a timely manner. For example, during a hot summer, HVAC systems can malfunction. Initiating the procurement process after systems malfunction can take several weeks. Any delays in responding to a service request can negatively affect a teacher’s ability to provide instruction or distract a student from learning.”

“AB 2488 authorizes the LAUSD to utilize a pilot program that would allow the school district to enter into contracts in advance of the service being requested. The school district would still be required to adhere to existing law regarding competitive bidding. However, those requirements would be completed prior to when the work is needed.”

LAUSD indicates that with enrollment of 620,000 students and over 1,000 schools, it is inevitable that the school district receives more service requests than existing maintenance personnel can reasonably process in a timely manner during the school year. It can take several weeks to complete current procurement processes and award contracts at each location where work is needed because each contracted job requires a separate bid request, which can lead to delays in repairs. According to LAUSD, allowing the district to conduct a task order procurement process for maintenance and repair work (such as HVAC repair) would allow the district to (a) respond to service requests when they are needed, (b) secure prices during non-peak periods, and (c) prevent the district from having to issue a specific bid request for each project requiring service.

1. Public project competitive bidding. Under current law, school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Alternative methods for awarding contracts include: (a) design-build, with a school district issuing a request for proposal for both the design and construction of projects; (b) best value, allowing school districts to consider factors other than cost; and (c) job order contracting, based on prices for specific construction tasks.

This bill does not change the bidding process or the requirement to accept the lowest responsible bidder, but allows LAUSD to issue multiple contracts for a specific service through a single request for bid. When services are required, the contractors will complete one or more service repairs based on the pre-determined price up to a maximum amount of $3 million.

1. Lease-leaseback and lease-to-own. Lease-leaseback is a process whereby a governing board of a school district may, through a competitive bidding process, rent district property for a minimum of $1 a year to any person, firm, or corporation. The person, firm, or corporation constructs the school building and rents the facility back to the school district. At the end of the lease, the district resumes title to the building and site.

In a lease-to-own agreement, the governing board of a school district may, through a competitive bidding process, enter into a contract with a person, firm, or corporation to construct the building on a designated site and lease the property to the school district. The school district gets the title at the end of the lease.

1. Job order contracting. Job order contracting is a procedure that allows for the awarding of contracts based on prices for specific construction tasks rather than bids for a specific project. A catalog or book identifies all work that could be performed, typically maintenance or modernization, and the unit prices for each of those tasks. The tasks are based on accepted industry standards and prices include the cost of materials, labor, and equipment for performing the work, but exclude overhead and profit. A contractor, who has been prequalified, rather than bid a total price for the project, will bid an adjustment factor, which reflects specified costs, to the preset unit prices.

Selection of the contractors is based on the lowest responsible bidder. This process is intended to reduce costs and accelerate completion of smaller projects; it is not generally viewed as an appropriate method of contracting for large, complex construction projects that require extensive or innovative design or are likely to encounter changes and revisions during constructions.

1. Other contracting pilot a success. AB 14 (Horton, Chapter 889, Statutes of 2003) first authorized job order contracting on a pilot basis at LAUSD from January 1, 2004, until December 1, 2007. In subsequent extensions of the pilot program, procedures were established to review and penalize violations of the program, require notifications of the scope of work, and require reports to the Legislature.

In its November 2011 report, LAUSD reported that, since the inception of job order contracting in 2005, the district has executed 138 master contracts with 44 different contracting firms. As of November 1, 2011, the district had issued master contracts valued at up to $791 million, with total contract receipts ranging from $200,000 to $10 million per contractor. For job orders completed through November 1, 2011, the district reported that actual project costs were reduced by an average of 9.3 percent as compared to the estimates and the procurement time. The district reports that the procurement time savings varied among projects, but overall, job order contracting produced significant time savings and provided the district with a valuable procurement tool.

Due to the success of the LAUSD pilot, AB 1431 (Gomez, Chapter 753, Statutes of 2015) authorized all school districts that have entered into a project labor agreement to utilize job order contracting.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/27/18)

Los Angeles Unified School District (source)

OPPOSITION: (Verified 6/27/18)

Associated Builders and Contractors

Plumbing-Heating-Cooling Contractors Association of California

ASSEMBLY FLOOR: 69-1, 5/29/18

AYES: Acosta, Aguiar-Curry, Baker, Berman, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Frazier, Friedman, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NOES: Harper

NO VOTE RECORDED: Travis Allen, Arambula, Bigelow, Brough, Fong, Gallagher, Kiley, Patterson

Prepared by:

6/26/18 13:09:51

**** END ****

SENATE COMMITTEE ON EDUCATION

Senator Benjamin Allen, Chair

2017 - 2018 Regular

Bill No: AB 2488 Hearing Date: June 13, 2018

Subject: School facilities: task order procurement contracting: Los Angeles Unified School District.

SUMMARY

This bill creates a five-year pilot program to allow Los Angeles Unified School District (LAUSD) to award multiple task order procurement contracts through a single bid request for repairing and renovating school facilities.

BACKGROUND

Existing law:

1. Requires the governing board of a school district to competitively bid and award to the lowest bidder contracts involving the following:
   1. An expenditure of $50,000 or more for the purchase of equipment, materials, or supplies, services (except for construction services), and repairs.
   2. An expenditure of $15,000 or more for a public contract project defined as construction, reconstruction, erection, alteration, renovation, improvement, demolition, repair, painting or repainting of any publicly owned, leased, or operated facility.
2. Establishes alternative methods for awarding school construction contracts, including lease-leaseback, design-build, best value, and job order contracting.
3. Authorizes contracting for services customarily performed by classified school employees only based on specified conditions.

ANALYSIS

This bill creates a five-year pilot program to allow LAUSD to award multiple task order procurement contracts through a single bid request for repairing and renovating school facilities. Specifically, this bill:

1. Authorizes the governing board of LAUSD to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds, each not exceeding $3,000,000, through a single request for bid.
2. Specifies that task order procurement contracts may include, but are not limited to, services, repairs, including maintenance, and construction as authorized in Public Contract Code Section (PCC) 20111 and paid for with moneys from Los Angeles Unified School District’s (LAUSD’s) general fund. Requires the contracts to be awarded to the lowest responsible bidder, and be based primarily on plans and specifications for typical work.
3. Specifies the following parameters:
   1. Prior to entering into a contract, LAUSD shall ensure that it is in compliance with Education Code Section (EDC) 45103.1.
   2. Task order procurement contracts may only be awarded to supplement existing personnel and shall not be used to supplant existing personnel.
   3. LAUSD may utilize task order procurement contracting only if it has entered into a project labor agreement or agreements that meet the requirements of PCC 2500 for all its public works projects.
4. Requires LAUSD to, no later than January 15, 2023, submit to the appropriate policy and fiscal committees of the Legislature a report on the use of the task order procurement contracting method. The report shall be prepared by an independent third party and LAUSD shall pay for the cost of the report.
5. Requires the report to include, but not be limited to, the following information:
   1. A description of the projects awarded using the task order procurement contracting method.
   2. The contract award amounts.
   3. The task order contractors awarded the projects.
   4. A description of any written protests concerning any aspect of the solicitation, bid, or award of the task order procurement contracts, including the resolution of the protests.
   5. A description of the prequalification process.
   6. If a project awarded under this article has been completed, an assessment of the project performance, including, but not limited to, a summary of any delays or cost increases.
6. Specifies that the task order procurement contracting method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of LAUSD to let a contract for a project to the lowest responsible bidder or else reject all bids.
7. Sunsets on January 1, 2024.

STAFF COMMENTS

1. Need for the bill. According to the author, “While the Public Contract Code sets the terms and structure for awarding public works contracts, the needs in the field cannot always be anticipated. Throughout the school year, it is inevitable that a school district will receive more service requests than existing maintenance personnel can reasonably process in a timely manner. For example, during a hot summer, HVAC systems can malfunction. Initiating the procurement process after systems malfunction can take several weeks. Any delays in responding to a service request can negatively affect a teacher’s ability to provide instruction or distract a student from learning.”

“AB 2488 authorizes the LAUSD to utilize a pilot program that would allow the school district to enter into contracts in advance of the service being requested. The school district would still be required to adhere to existing law regarding competitive bidding. However, those requirements would be completed prior to when the work is needed.”

The Los Angeles Unified School District (LAUSD) indicates that with enrollment of 620,000 students and over 1,000 schools, it is inevitable that the school district receives more service requests than existing maintenance personnel can reasonably process in a timely manner during the school year. It can take several weeks to complete current procurement processes and award contracts at each location where work is needed because each contracted job requires a separate bid request, which can lead to delays in repairs. According to LAUSD, allowing the district to conduct a task order procurement process for maintenance and repair work (such as HVAC repair) would allow the district to (1) respond to service requests when they are needed, (2) secure prices during non-peak periods, and (3) prevent the district from having to issue a specific bid request for each project requiring service.

1. Public project competitive bidding. Under current law, school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Alternative methods for awarding contracts include: (1) design-build, with a school district issuing a request for proposal for both the design and construction of projects; (2) best value, allowing school districts to consider factors other than cost; and (3) job order contracting, based on prices for specific construction tasks.

This bill does not change the bidding process or the requirement to accept the lowest responsible bidder, but allows LAUSD to issue multiple contracts for a specific service through a single request for bid. When services are required, the contractors will complete one or more service repairs based on the pre-determined price up to a maximum amount of $3 million.

1. Lease-leaseback and lease-to-own. Lease-leaseback is a process whereby a governing board of a school district may, through a competitive bidding process, rent district property for a minimum of $1 a year to any person, firm, or corporation. The person, firm, or corporation constructs the school building and rents the facility back to the school district. At the end of the lease, the district resumes title to the building and site.

In a lease-to-own agreement, the governing board of a school district may, through a competitive bidding process, enter into a contract with a person, firm, or corporation to construct the building on a designated site and lease the property to the school district. The school district gets the title at the end of the lease.

1. Job order contracting. Job order contracting is a procedure that allows for the awarding of contracts based on prices for specific construction tasks rather than bids for a specific project. A catalog or book identifies all work that could be performed, typically maintenance or modernization, and the unit prices for each of those tasks. The tasks are based on accepted industry standards and prices include the cost of materials, labor, and equipment for performing the work, but exclude overhead and profit. A contractor, who has been prequalified, rather than bid a total price for the project, will bid an adjustment factor, which reflects specified costs, to the preset unit prices.

Selection of the contractors is based on the lowest responsible bidder. This process is intended to reduce costs and accelerate completion of smaller projects; it is not generally viewed as an appropriate method of contracting for large, complex construction projects that require extensive or innovative design or are likely to encounter changes and revisions during constructions.

1. Other contracting pilot a success. AB 14 (Horton, 2003) first authorized job order contracting on a pilot basis at Los Angeles Unified School District (LAUSD) from January 1, 2004, until December 1, 2007. In subsequent extensions of the pilot program, procedures were established to review and penalize violations of the program, require notifications of the scope of work, and require reports to the Legislature.

In its November 2011 report, LAUSD reported that, since the inception of job order contracting in 2005, the district has executed 138 master contracts with 44 different contracting firms. As of November 1, 2011, the district had issued master contracts valued at up to $791 million, with total contract receipts ranging from $200,000 to $10 million per contractor. For job orders completed through November 1, 2011, the district reported that actual project costs were reduced by an average of 9.3 percent as compared to the estimates and the procurement time. The district reports that the procurement time savings varied among projects, but overall, job order contracting produced significant time savings and provided the district with a valuable procurement tool.

Due to the success of the LAUSD pilot, AB 1431 (Gomez, 2015) authorized all school districts that have entered into a project labor agreement to utilize job order contracting.

SUPPORT

Los Angeles Unified School District (sponsor)

OPPOSITION

Plumbing-Heating-Cooling Contractors Association of California

Associated Builders and Contractors

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2488

Author:(O'Donnell)

As Amended Ver:May 1, 2018

Majority vote

SUMMARY: Establishes a pilot project authorizing the Los Angeles Unified School District (LAUSD) to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds through a single request for bid. Specifically, this bill:

1. Authorizes the governing board of a school district to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds, each not exceeding $3,000,000, through a single request for bid.
2. Specifies that for the purposes of this bill, task order procurement contracts may include, but are not limited to, services, repairs, including maintenance, and construction as authorized in Public Contract Code Section (PCC) 20111 and paid for with moneys from the school district’s general fund. Requires the contracts to be awarded to the lowest responsible bidder, and be based primarily on plans and specifications for typical work.
3. Defines "school district" as the Los Angeles Unified School District.
4. Specifies the following parameters:
   1. Prior to entering into a contract, a school district shall ensure that it is in compliance with Education Code Section (EDC) 45103.1.
   2. Task order procurement contracts may only be awarded to supplement existing personnel and shall not be used to supplant existing personnel.
   3. A school district may utilize task order procurement contracting only if the school district has entered into a project labor agreement or agreements that meet the requirements of PCC 2500 for all its public works projects.
5. Requires a school district that uses the task order procurement contracting method to, no later than January 15, 2023, submit to the appropriate policy and fiscal committees of the Legislature a report on the use of the task order procurement contracting method. The report shall be prepared by an independent third party and the school district shall pay for the cost of the report.
6. Requires the report to include, but is not limited to, the following information:
   1. A description of the projects awarded using the task order procurement contracting method.
   2. The contract award amounts.
   3. The task order contractors awarded the projects.
   4. A description of any written protests concerning any aspect of the solicitation, bid, or award of the task order procurement contracts, including the resolution of the protests.
   5. A description of the prequalification process.
   6. If a project awarded under this article has been completed, an assessment of the project performance, including, but not limited to, a summary of any delays or cost increases.
7. Specifies that the task order procurement contracting method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
8. Sunsets on January 1, 2024.
9. Expresses the intent of the Legislature to provide an optional alternative procedure for bidding to improve contract efficiencies and reduce the general fund impact to a school district.
10. Finds and declares that a special statute is necessary because of the need to establish a pilot project for the LAUSD to determine the potential benefits and consequences of using task order procurement contracting to facilitate infrastructure improvements and ease fiscal impacts.

EXISTING LAW:

1. Requires the governing board of a school district to competitively bid and award to the lowest bidder contracts involving the following:
   1. An expenditure of $50,000 or more for the purchase of equipment, materials, or supplies, services (except for construction services), and repairs.
   2. An expenditure of $15,000 or more for a public contract project defined as construction, reconstruction, erection, alteration, renovation, improvement, demolition, repair, painting or repainting of any publicly owned, leased, or operated facility. (PCC 20111 and 22002)
2. Establishes alternative methods for awarding school construction contracts, including lease-leaseback, design-build, best value, and job order contracting. (EDC 17406 and 17250.10, PCC 20119 and 20919.20)
3. Authorizes contracting for services customarily performed by classified school employees only based on specified conditions. (EDC 45103.1)

FISCAL EFFECT: According to the Assembly Appropriations Committee, no additional costs.

COMMENTS: Background on contracting. Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Alternative methods for awarding contracts have emerged over time, including design-build, which enables a school district to issue a bid for both the design and construction of projects over $10 million; best value, which authorizes school districts to consider factors other than cost; lease-leaseback, which allows a school district to lease district-owned property to a developer or contractor who constructs the project and leases the facility back to the school district; and job order contracting (JOC).

Awarding contracts prior to when services are needed. A unique aspect of JOC is that the contracts are awarded prior to when the services are needed. JOC is not based on bids for a specific project, but rather based on prices for specific construction tasks. A contractor, who has been prequalified, submits bids using an adjustment factor. The unit price, multiplied by the adjustment factor equals the price the contractor is willing to accept for work for those tasks. Selection of the contractors is based on the lowest responsible bidder; however, a school district may select more than one contractor. When the school district has a project that requires the tasks for which a contractor has been awarded, the school district will provide a job order with the details of the job. JOC allows a school district to identify contractors for specific tasks and locks in the price for up to $5 million worth of work before the job is needed.

In its report to the Legislature in 2011, the LAUSD stated that for "job orders completed through November 1, 2011, actual project costs were reduced by an average of 9.26% as compared to the estimates and the procurement time. The procurement time savings varied among projects, but overall, produced significant time savings and provided the LAUSD with a valuable procurement tool."

This bill resembles JOC and a similar authorization given to the California State University (PCC 10726), but whereas JOC is used for capital infrastructure – new construction and modernization projects that are funded by state or local bonds, developer fees or other types of property assessments – this bill authorizes LAUSD to award multiple contracts through a single request for bid for services, maintenance and repair work that are funded by the district’s general funds. The maximum amount per contract is $3 million.

Current law allows contracting for work customarily performed by classified employees only to achieve cost savings and only if specified conditions are met, including, in part, the following: the contractor’s wages are at the industry's level and do not undercut school district pay rates, the contract does not cause the displacement of school district employees, the services contracted are not available within the district, the services are needed for emergency appointments, and the contractor has equipment, materials or support services that could not feasibly be provided by the school district in the location where services are to be performed. This bill reiterates requirement to comply with this provision.

Purpose of the bill. This bill is a pilot project for the LAUSD. The LAUSD states that the normal contracting process based on competitive bidding takes several weeks. With an enrollment of 620,000 and over 1,000 schools covering 710 square miles, including the City of Los Angeles and 26 cities and unincorporated areas of Los Angeles County, it is inevitable for the school district to receive more service requests than existing maintenance personnel can reasonably process in a timely manner during the school year. For example, in 2015, LAUSD received nearly 2,600 service calls for heating, ventilation and air conditioning (HVAC) repair. With a service staff of 39 HVAC repair personnel, the district had to contract out for services due to the high volume. It took several weeks to complete the procurement process and award contracts as each location where work was needed required a separate bid request. Initiating the procurement process after systems malfunction causes delay in repairs, which can negatively affect a teacher's ability to provide instruction or distract a student from learning. Allowing the district to conduct a competitive bidding process for HVAC and other services earlier has three benefits: 1) it allows the district to respond to service requests when they are needed; 2) it allows the district to secure prices during non-peak periods, thereby saving district general fund dollars for other needs; and 3) it prevents the district from having to issue a specific bid request for each project requiring service.

This bill does not change the bidding process or the requirement to accept the lowest responsible bidder. The bill simply allows the district to issue multiple contracts (e.g., five companies) for a specific service (e.g., HVAC repair) through a single request for bid (versus a separate bid request for each service location). When the services are required, the contractors will complete one or more service repairs based on the pre-determined price up to a maximum amount of $3 million.

The provisions of this bill sunset on January 1, 2024 and requires LAUSD to submit a report to the Legislature with specified information, including a description of the projects, the contract award amounts, the contractors awarded projects, and an assessment of the project performance.

LAUSD states, "Assembly Bill 2488 would establish a more efficient process for addressing maintenance and operations needs and allow for cost savings by negotiating service costs in advance of peak demands or priority requests."

Analysis Prepared by: Sophia Kwong Kim / ED. / (916) 319-2087 FN: 0003229

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2488

Author:(O'Donnell) – As Amended Ver:May 1, 2018

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY: This bill creates a pilot program to allow Los Angeles Unified School District (LAUSD) to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds through a single request for bid. It sunsets the pilot on January 1, 2024, and requires LAUSD to submit an independently written report, funded from its general purpose funds, by January 15, 2023, on the use of the task order procurement contracting method. The bill also specifies task order procurement contracts may only be awarded to supplement existing personnel and not to supplant existing personnel.

FISCAL EFFECT:

No additional costs.

COMMENTS:

1. Purpose. LAUSD indicates that with enrollment of 620,000 students and over 1,000 schools, it is inevitable that the school district receive more service requests than existing maintenance personnel can reasonably process in a timely manner during the school year. It can take several weeks to complete current procurement processes and award contracts at each location where work is needed because each contracted job requires a separate bid request, which can lead to delays in repairs. According to LAUSD, allowing the district to conduct a task order procurement process for maintenance and repair work (such as HVAC repair) would allow the district to a) respond to service requests when they are needed, b) secure prices during non-peak periods, and c) prevent the district from having to issue a specific bid request for each project requiring service.
2. Background. Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Law also allows alternative methods for awarding contracts, including design-build, which allows a school district to issue a bid for both the design and construction of projects over $10 million; best value procurement, which authorizes school districts to consider factors other than cost when awarding contracts; lease-leaseback, which allows a school district to lease district-owned property to a developer or contractor who constructs the project and leases the facility back to the school district; and job order contracting, which awards capital infrastructure (new construction and modernization funded typically with bonds) contracts prior to when services are needed, up to $5 million worth of work.

Job order contracting is similar to the task order procurement as outlined in this bill, except task order contracting will be for maintenance and repair work and funded with local dollars, for up to $3 million worth of work.

This bill does not change the bidding process or the requirement to accept the lowest responsible bidder, but allows LAUSD to issue multiple contracts for a specific service through a single request for bid (versus a separate bid request for each service location). When services are required, the contractors will complete one or more service repairs based on the pre-determined price up to a maximum amount of $3 million.

Analysis Prepared by: Natasha Collins / APPR. / (916) 319-2081

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON EDUCATION

Patrick O'Donnell, Chair

ABPCA Bill Id:AB 2488 (

Author:O'Donnell) – As Amended Ver:March 22, 2018

SUBJECT: School facilities: task order procurement contracting: Los Angeles Unified School District

SUMMARY: Establishes a pilot project authorizing the Los Angeles Unified School District (LAUSD) to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds through a single request for bid. Specifically, this bill:

1. Authorizes the governing board of a school district to award multiple task order procurement contracts for the repair and renovation of school buildings and grounds, each not exceeding $3,000,000, through a single request for bid.
2. Specifies that for the purposes of this bill, task order procurement contracts may include, but are not limited to, services, repairs, including maintenance, and construction as authorized in Section 20111 of the Public Contract Code (PCC). Requires the contracts to be awarded to the lowest responsible bidder, and be based primarily on plans and specifications for typical work.
3. Defines “school district” as the Los Angeles Unified School District.
4. Specifies the following parameters:
   1. Prior to entering into a contract, a school district shall ensure that it is in compliance with Section 45103.1 of the Education Code.
   2. Task order procurement contracts may only be awarded to supplement existing personnel and shall not be used to supplant existing personnel.
   3. A school district may utilize task order procurement contracting only if the school district has entered into a project labor agreement or agreements that meet the requirements of PCC Section 2500 for all its public works projects.
5. Requires a school district that uses the task order procurement contracting method to, no later than January 15, 2023, submit to the appropriate policy and fiscal committees of the Legislature a report on the use of the task order procurement contracting method. The report shall be prepared by an independent third party and the school district shall pay for the cost of the report.
6. Requires the report to include, but is not limited to, the following information:
   1. A description of the projects awarded using the task order procurement contracting method.
   2. The contract award amounts.
   3. The task order contractors awarded the projects.
   4. A description of any written protests concerning any aspect of the solicitation, bid, or award of the task order procurement contracts, including the resolution of the protests.
   5. A description of the prequalification process.
   6. If a project awarded under this article has been completed, an assessment of the project performance, including, but not limited to, a summary of any delays or cost increases.
7. Specifies that the task order procurement contracting method is not intended to change any guideline, criterion, procedure, or requirement of the governing board of the school district to let a contract for a project to the lowest responsible bidder or else reject all bids.
8. Sunsets on January 1, 2024.
9. Expresses the intent of the Legislature to provide an optional alternative procedure for bidding to improve contract efficiencies and reduce the general fund impact to a school district.
10. Finds and declares that a special statute is necessary because of the need to establish a pilot project for the LAUSD to determine the potential benefits and consequences of using task order procurement contracting to facilitate infrastructure improvements and ease fiscal impacts.

EXISTING LAW:

1. Requires the governing board of a school district to competitively bid and award to the lowest bidder contracts involving the following:
   1. An expenditure of $50,000 or more for the purchase of equipment, materials, or supplies, services (except for construction services), and repairs.
   2. An expenditure of $15,000 or more for a public contract project defined as construction, reconstruction, erection, alteration, renovation, improvement, demolition, repair, painting or repainting of any publicly owned, leased, or operated facility. (PCC Sections 20111 and 22002)
2. Establishes alternative methods for awarding school construction contracts, including lease-leaseback, design-build, best value, and job order contracting. (Education Code Sections 17406 and 17250.10, PCC Sections 20119 and 20919.20)
3. Authorizes contracting for services customarily performed by classified school employees only based on specified conditions. (EC Section 45103.1)

FISCAL EFFECT: Unknown

COMMENTS: Background on contracting. Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. Alternative methods for awarding contracts have emerged over time, including design-build, which enables a school district to issue a bid for both the design and construction of projects over $10 million; best value which authorizes school districts to consider factors other than cost; lease-leaseback, which allows a school district to lease district-owned property to a developer or contractor who constructs the project and leases the facility back to the school district; and job order contracting (JOC).

Awarding contracts prior to when services are needed. A unique aspect of JOC is that the contracts are awarded prior to when the services are needed. JOC is not based on bids for a specific project, but rather based on prices for specific construction tasks. A contractor, who has been prequalified, submits bids using an adjustment factor. The unit price, multiplied by the adjustment factor equals the price the contractor is willing to accept for work for those tasks. Selection of the contractors is based on the lowest responsible bidder; however, a school district may select more than one contractor. When the school district has a project that requires the tasks for which a contractor has been awarded, the school district will provide a job order with the details of the job. JOC allows a school district to identify contractors for specific tasks and locks in the price for up to $5 million worth of work.

In its report to the Legislature in 2011, the LAUSD stated that for "job orders completed through November 1, 2011, actual project costs were reduced by an average of 9.26% as compared to the estimates and the procurement time. The procurement time savings varied among projects, but overall, produced significant time savings and provided the LAUSD with a valuable procurement tool."

This bill resembles JOC and a similar authorization given to the California State University (PCC Section 10726), but whereas JOC is used for capital infrastructure – new construction and modernization projects that are funded by state or local bonds, developer fees or other types of property assessments – this bill authorizes LAUSD to award multiple contracts through a single request for bid for services, maintenance and repair work that are funded by the district’s general funds. The maximum amount per contract is $3 million.

Current law allows contracting for work customarily performed by classified employees only to achieve cost savings and only if specified conditions are met, including, in part, the following: the contractor’s wages are at the industry’s level and do not undercut school district pay rates, the contract does not cause the displacement of school district employees, the services contracted are not available within the district, the services are needed for emergency appointments, and the contractor has equipment, materials or support services that could not feasibly be provided by the school district in the location where services are to be performed. This bill reiterates requirement to comply with this provision.

Need for bill. This bill is a pilot project for the LAUSD. The LAUSD states that the normal contracting process based on competitive bidding takes several weeks. With an enrollment of 620,000 and over 1,000 schools covering 710 square miles, including the City of Los Angeles and 26 cities and unincorporated areas of Angeles County, it is inevitable for the school district to receive more service requests than existing maintenance personnel can reasonably process in a timely manner during the school year. For example, in 2015, LAUSD received nearly 2,600 service calls for HVAC repair. With a service staff of 39 HVAC repair personnel, the district had to contract out for services due to the high volume. It took several weeks to complete the procurement process and award contracts as each location where work was needed required a separate bid request. Initiating the procurement process after systems malfunction causes delay in repairs, which can negatively affect a teacher’s ability to provide instruction or distract a student from learning. Allowing the district to conduct a competitive bidding process for HVAC and other services earlier has three benefits. One, it allows the district to respond to service requests when they are needed; two, it allows the district to secure prices during non-peak periods, thereby saving district general fund dollars for other needs; and three, it prevents the district from having to issue a specific bid request for each project requiring service.

This bill does not change the bidding process or the requirement to accept the lowest responsible bidder. The bill simply allows the district to issue multiple contracts (e.g., five companies) for a specific service (e.g., HVAC repair) through a single request for bid (versus a separate bid request for each service location). When the services are required, the contractors will complete one or more service repairs based on the pre-determined price up to a maximum amount of $3 million.

The LAUSD states, “Assembly Bill 2488 would establish a more efficient process for addressing maintenance and operations needs and allow for cost savings by negotiating service costs in advance of peak demands or priority requests.”

Committee amendment: Staff recommends the following amendments:

1. Strike the code section on page 3, line 7. Intent provisions are generally not codified.
2. Clarify that the contracts issued pursuant to this bill are those that are funded by the general fund. This is to better distinguish and differentiate the types of jobs to be awarded through JOC versus task order contracting.

REGISTERED SUPPORT / OPPOSITION:

Support

Los Angeles Unified School District (sponsor)

Opposition

None received

Analysis Prepared by: Sophia Kwong Kim / ED. / (916) 319-2087