Date of Hearing: April 24, 2019

ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW

Cottie Petrie-Norris, Chair

ABPCA Bill Id:AB 971 (

Author:Salas) – As Amended Ver:April 22, 2019

SUBJECT: Public contracts: information technology services: completion bonuses: contractor evaluations

SUMMARY: Provides for the post-evaluation of contractors for state information technology (IT) services, as specified, and allows IT contractors to receive bonus payments for completing projects early and under budget. Specifically, this bill:

1. Requires each state department to conduct a post-evaluation of each contract for the acquisition of IT services totaling $5,000 or more that it executes.
2. Directs each department to evaluate the performance of the contractor after completing the work specified in the contract and base the post-evaluation on objective facts and contract performance data.
3. Requires the Department of General Services (DGS) to develop, and state departments to use, a standard form that contains evaluation factors and a rating scale that designates the contractor’s work as satisfactory or unsatisfactory.
4. Provides that the public official who signs the post-evaluation must certify its accuracy under penalty of perjury.
5. Directs each department to report specified information in the post-evaluation and specifies that the post-evaluation must be prepared within 60 days of completion of the contract.
6. Provides that the post-evaluation must remain on file at the office of the awarding department for 36 months and requires unsatisfactory post-evaluations to be sent to DGS within five working days, as specified.
7. Requires the department, upon sending the unsatisfactory post-evaluation to DGS, to notify and send a copy to the contractor within 15 days.
8. Allows a contractor to comment on an unsatisfactory post-evaluation and requires the contractor’s response to be attached and filed with it.
9. Defines “department” for purposes of this bill to mean the California Department of Technology, DGS, and any other agency with delegated authority to contract for the acquisition of IT services.
10. Allows an IT contractor to receive a bonus payment for completing a project early and under budget.

EXISTING LAW specifies requirements in Public Contract Code Section 10369 for post-evaluations of contractors who provide non-IT consulting services totaling $5,000 or more to the state.

FISCAL EFFECT: Unknown

COMMENTS: This bill sets up a post-evaluation framework for contractors providing state IT services of $5,000 or more.

According to the author, this bill is intended to establish contractor accountability for state IT projects and is similar to current law governing post-evaluations of contractors who provide consulting services to the state.

Current law requires a state agency awarding a consulting service contract of $5,000 or more to document the performance of the contractor after the contract is complete. If the contractor does not satisfactorily perform the work or service specified in the contract, the agency conducting the post-evaluation is required to keep a copy of the unsatisfactory evaluation form and then send it to DGS. Before awarding such a contract, an agency must review a prospective contractor’s prior performance evaluations by checking with DGS to determine if any unsatisfactory post-evaluations are on file.

Once an agency forwards an unsatisfactory evaluation to DGS, it must then notify and send a copy of it to the contractor within 15 days. The contractor is allowed 30 days to submit a written response which must then be part of the evaluation maintained in both the agency’s and DGS’ files. The State Contracting Manual specifies that these post-evaluations and the contractor responses on file with the agency and DGS are not public records.

In addition to applying similar requirements to IT contractors, this bill would reward IT contractors with bonus payments for completing projects early and under budget. Such bonus amounts or percentages are not specified in this bill. Instead, they would be determined at the discretion of departments and specified in contracts.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Cassie Royce / A. & A.R. / (916) 319-3600

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 971

Author:(Salas)

As Amended Ver:August 30, 2019

Majority vote

SUMMARY:

Provides for the post-evaluation of contractors for state information technology (IT) services, as specified.

The Senate Amendments:

1. Limit the IT contracts subject to this bill to those totaling $500,000 or more.
2. Require the California Department of Technology (CDT) and the Department of General Services (DGS) to jointly develop a standard form or forms and procedures to implement this bill.
3. Direct each state agency that receives the IT services to use the standard form or forms that contain objective post-evaluation factors or metrics appropriate to the nature of the IT service and project type.
4. Require CDT and DGS to jointly gather feedback, as specified, from stakeholders in the IT industry.
5. Require a public official who signs a post-evaluation to confirm its accuracy.
6. Clarify the type of information to be reported on the standard form or forms.
7. Specify the conditions under which a post-evaluation shall be considered unsatisfactory.
8. Prohibit the post-evaluations and contractor responses from being considered public records.
9. Make other minor technical and clarifying changes.

COMMENTS:

Senate amendments narrow the number of IT contracts that would be subject to this bill to those totaling $500,000 or more; direct CDT and DGS to jointly implement this bill; require the public official who signs the post-evaluation to confirm its accuracy rather than certify its accuracy under penalty of perjury; specify that the information reported on the standard form or forms must include whether the contracted work was completed within the time and budget specified in the contract; and, provide that the post-evaluations and contractor responses shall not be considered public records.

According to the Author:

This bill is intended to establish contractor accountability for state IT projects and is similar to current law governing post-evaluations of contractors who provide consulting services to the state.

Arguments in Support:

None on file.

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

VOTES:

ASM ACCOUNTABILITY AND ADMINISTRATIVE REVIEW: 7-0-0

YES: Petrie-Norris, Patterson, Burke, Lackey, Medina, Quirk-Silva, Smith

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ASSEMBLY FLOOR: 75-0-5

YES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Gipson, Gloria, Gonzalez, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager‑Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Obernolte, Patterson, Petrie‑Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

ABS, ABST OR NV: Cooley, Eggman, Eduardo Garcia, Gray, Ting

UPDATED:

VERSION: August 30, 2019

CONSULTANT: Cassie Royce / A. & A.R. / (916) 319-3600 FN: 0001878

 THIRD READING  

Bill No: AB 971

Author: Salas (D)

Amended: 8/30/19 in Senate

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 15-0, 7/9/19

AYES: Dodd, Wilk, Allen, Archuleta, Bradford, Chang, Galgiani, Glazer, Hill, Hueso, Jones, Nielsen, Portantino, Rubio, Wiener

NO VOTE RECORDED: Borgeas

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 75-0, 5/28/19 - See last page for vote

SUBJECT: Public contracts: information technology services: contractor evaluations

SOURCE: Author

DIGEST:

This bill requires an awarding department to conduct a postevaluation for each contract for the acquisition of information technology (IT) for $500,000 or more; and, requires the Department of Technology (CDT) and the Department of General Services (DGS) to jointly develop a standard form and procedures for the postevaluation, as specified.

Senate Floor Amendments of 8/30/19 raise the value of which contracts must be evaluated to $500,000; specify that the postevaluations are not a public record; and, make other minor and non-substantive changes.

ANALYSIS:

Existing law:

1. Requires all contracts for the acquisition of IT goods and services related to IT projects to be made by or under the supervision of the CDT, as specified.
2. Requires all other contracts for the acquisition of IT goods or services to be made by or under the supervision of DGS, as specified.
3. Requires each state agency to conduct a postevaluation, by completing a post-evaluation form, of each consulting services contract totaling $5,000 or more that it executes.

This bill:

1. Requires an awarding department to conduct a post-evaluation of each contract for the acquisition of IT services totaling $500,000 or more that it executes.
2. Requires an awarding department to evaluate the performance of the contractor based on objective facts and with the support of program and contract performance data, within 60 days of the completion of the contract.
3. Requires CDT and DGS to jointly develop a standard form or forms and the procedures for conducting a postevaluation.
4. Provides that if the contractor’s performance was judged unsatisfactory on any of the factors or metrics, the postevaluation shall be considered unsatisfactory, as specified.
5. Requires postevaluations to remain on file at the offices of the awarding department for a period of 36 months following contract completion, and requires an awarding department to send a copy of the form to CDT within five working days of the completion of the postevaluation.
6. States that if the contractor did not satisfactorily perform the work specified in the contract, the department conducting the postevaluation shall place one copy of the postevaluation form in the department’s contract file and, if the department is not DGS, send one copy of the form to DGS within five working days.
7. Requires an awarding department, upon filing an unsatisfactory postevaluation or sending a copy to CDT, to notify and send a copy of the postevaluation to the contractor within 15 days.
8. Authorizes a contractor to comment on a negative postevaluation. Comments made pursuant to this authorization shall be attached to and filed with the copies of the postevaluation.
9. Specifies that postevaluations and contractor responses are not public records.
10. Requires a public official who signs a postevaluation to confirm its accuracy.

Background

Contracts for consulting services. Current law requires a state agency awarding a consulting service contract of $5,000 or more to document the performance of the contractor after the contract is complete. If the contractor does not satisfactorily perform the work or service specified in the contract, the agency conducting the postevaluation is required to keep a copy of the unsatisfactory evaluation form and then send it to DGS. Before awarding such a contract, an agency must review a prospective contractor’s prior performance evaluations by checking with DGS to determine if any unsatisfactory postevaluations are on file.

Once an agency forwards an unsatisfactory evaluation to DGS, it must then notify and send a copy of it to the contractor within 15 days. The contractor is allowed 30 days to submit a written response which must then be part of the evaluation maintained in both the agency’s and DGS’ files. The State Contracting Manual specifies that these postevaluations and the contractor responses on file with the agency and DGS are not public records.

Existing law requires all contracts for the acquisition of IT goods and services related to IT projects to be made by or under the supervision of CDT, and requires all other contracts for the acquisition of IT goods or services to be made by or under the supervision of DGS. Under existing law, both CDT and DGS are authorized to delegate their authority to another agency. This bill sets up a substantially similar process for evaluating each contract for the acquisition of IT services totally $500,000 or more by the awarding department. Additionally, this bill CDT and DGS to jointly develop, and each awarding department to use, a standard form or forms that contain objective postevaluation factors or metrics, as specified.

Comments

Purpose of the bill. According to the author’s office, “every year, California spends millions of dollars on important IT projects that help modernize state departments and the services they provide. With these massive projects, California agencies routinely rely on third party contractors. While many of these projects are completed as planned, there are a number of examples where projects have surpassed the agreed upon budget or finished late which creates costs that are ultimately passed on to the taxpayers. Currently, existing law does not require state departments to conduct postevaluations after a project is completed.”

Further, the author’s office states that “this bill will create more accountability by requiring an awarding department to conduct a postevaluation after an IT project is finished. Through establishing a postevaluation system for certain IT projects, departments will have a thorough record of contractor performance to reference for future projects. This will allow departments to make more informed decisions and will create more transparency and accountability surrounding the state’s IT projects.”

Related/Prior Legislation

AB 572 (Kalra, 2019) establishes the Deforestation-Free Procurement Act and requires a contractor that is contracting with a state agency for the procurement of products comprised of forest-risk commodities to certify that the commodities were not grown, derived, harvested, reared, or produced on land where tropical deforestation occurred. (Held on the Senate Appropriations Suspense File)

AB 2304 (Davis, Chapter 759, Statutes of 2000) combined then separate statutes governing consulting services and personal services contract procedures, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 9/3/19)

None received

OPPOSITION: (Verified 9/3/19)

None received

ASSEMBLY FLOOR: 75-0, 5/28/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Gipson, Gloria, Gonzalez, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Cooley, Eggman, Eduardo Garcia, Gray, Ting

Prepared by: Brian Duke / G.O. / (916) 651-1530

9/3/19 16:48:30

**** END ****

 THIRD READING  

Bill No: AB 971

Author: Salas (D)

Amended: 7/2/19 in Senate

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 15-0, 7/9/19

AYES: Dodd, Wilk, Allen, Archuleta, Bradford, Chang, Galgiani, Glazer, Hill, Hueso, Jones, Nielsen, Portantino, Rubio, Wiener

NO VOTE RECORDED: Borgeas

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 75-0, 5/28/19 - See last page for vote

SUBJECT: Public contracts: information technology services: contractor evaluations

SOURCE: Author

DIGEST:

This bill requires an awarding department to conduct a postevaluation for each contract for the acquisition of information technology (IT) for $5,000 or more, and requires the Department of General Services (DGS), in consultation with the Department of Technology (CDT), to develop a standard form that contains objective postevaluation factors or metrics, as specified.

ANALYSIS:

Existing law:

1. Requires all contracts for the acquisition of IT goods and services related to IT projects to be made by or under the supervision of the CDT, as specified.
2. Requires all other contracts for the acquisition of IT goods or services to be made by or under the supervision of DGS, as specified.
3. Requires each state agency to conduct a postevaluation, by completing a post-evaluation form, of each consulting services contract totaling $5,000 or more that it executes.

This bill:

1. Requires an awarding department to conduct a post-evaluation of each contract for the acquisition of IT services totaling $5,000 or more that it executes.
2. Requires an awarding department to evaluate the performance of the contractor based on objective facts and with the support of program and contract performance data, within 60 days of the completion of the contract.
3. Requires DGS to develop, in consultation with CDT, and requires each department to use, a standard form or forms that contain objective postevaluation factors or metrics, as specified.
4. Provides that if the contractor’s performance was judged unsatisfactory on any of the factors or metrics, the postevaluation shall be considered unsatisfactory, as specified.
5. Requires postevaluations to remain on file at the offices of the awarding department for a period of 36 months following contract completion, and requires an awarding department to send a copy of the form to CDT within five working days of the completion of the postevaluation.
6. States that if the contractor did not satisfactorily perform the work specified in the contract, the department conducting the postevaluation shall place one copy of the postevaluation form in the department’s contract file and, if the department is not DGS, send one copy of the form to DGS within five working days.
7. Requires an awarding department, upon filing an unsatisfactory postevaluation or sending a copy to CDT, to notify and send a copy of the postevaluation to the contractor within 15 days.
8. Authorizes a contractor to comment on a negative postevaluation. Comments made pursuant to this authorization shall be attached to and filed with the copies of the postevaluation.
9. Requires a public official who signs a postevaluation to confirm its accuracy.

Background

Contracts for consulting services. Current law requires a state agency awarding a consulting service contract of $5,000 or more to document the performance of the contractor after the contract is complete. If the contractor does not satisfactorily perform the work or service specified in the contract, the agency conducting the postevaluation is required to keep a copy of the unsatisfactory evaluation form and then send it to DGS. Before awarding such a contract, an agency must review a prospective contractor’s prior performance evaluations by checking with DGS to determine if any unsatisfactory postevaluations are on file.

Once an agency forwards an unsatisfactory evaluation to DGS, it must then notify and send a copy of it to the contractor within 15 days. The contractor is allowed 30 days to submit a written response which must then be part of the evaluation maintained in both the agency’s and DGS’ files. The State Contracting Manual specifies that these postevaluations and the contractor responses on file with the agency and DGS are not public records.

Existing law requires all contracts for the acquisition of IT goods and services related to IT projects to be made by or under the supervision of CDT, and requires all other contracts for the acquisition of IT goods or services to be made by or under the supervision of DGS. Under existing law, both CDT and DGS are authorized to delegate their authority to another agency. This bill sets up a substantially similar process for evaluating each contract for the acquisition of IT services totally $5,000 or more by the awarding department. Additionally, this bill requires DGS, in consultation with CDT, to develop a standard form or forms that contain objective postevaluation factors or metrics for each awarding department to utilize.

Comments

Purpose of the bill. According to the author’s office, “every year, California spends millions of dollars on important IT projects that help modernize state departments and the services they provide. With these massive projects, California agencies routinely rely on third party contractors. While many of these projects are completed as planned, there are a number of examples where projects have surpassed the agreed upon budget or finished late which creates costs that are ultimately passed on to the taxpayers. Currently, existing law does not require state departments to conduct postevaluations after a project is completed.”

Further, the author’s office states that “this bill will create more accountability by requiring an awarding department to conduct a postevaluation after an IT project is finished. Through establishing a postevaluation system for certain IT projects, departments will have a thorough record of contractor performance to reference for future projects. This will allow departments to make more informed decisions and will create more transparency and accountability surrounding the state’s IT projects.”

Related/Prior Legislation

AB 572 (Kalra, 2019) establishes the Deforestation-Free Procurement Act and requires a contractor that is contracting with a state agency for the procurement of products comprised of forest-risk commodities to certify that the commodities were not grown, derived, harvested, reared, or produced on land where tropical deforestation occurred. (Pending in the Senate Governmental Organization Committee)

AB 2304 (Davis, Chapter 759, Statutes of 2000) combined then separate statutes governing consulting services and personal services contract procedures, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/19/19)

None received

OPPOSITION: (Verified 8/19/19)

None received

ASSEMBLY FLOOR: 75-0, 5/28/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Gipson, Gloria, Gonzalez, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Cooley, Eggman, Eduardo Garcia, Gray, Ting

Prepared by: Brian Duke / G.O. / (916) 651-1530

8/21/19 16:12:09

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2019 - 2020 Regular

Bill No: 971 Hearing Date: 6/25/2019

SUBJECT: Public contracts: information technology services: contractor evaluations

DIGEST: This bill requires an awarding department to conduct a postevaluation for each contract for the acquisition of information technology (IT) for $5,000 or more, and requires the Department of General Services (DGS), in consultation with the Department of Technology (CDT), to develop a standard form that contains objective postevaluation factors or metrics, as specified.

ANALYSIS:

Existing law:

1. Requires all contracts for the acquisition of IT goods and services related to IT projects to be made by or under the supervision of the CDT, as specified.
2. Requires all other contracts for the acquisition of IT goods or services to be made by or under the supervision of DGS, as specified.
3. Establishes various procedures for the procurement of state goods and services, including consulting services and personal services.
4. Requires each state agency to conduct a postevaluation, by completing a post-evaluation form, of each consulting services contract totaling $5,000 or more that it executes.
5. Requires the state agency to evaluate the performance of the contractor in doing the work or delivering the services for which the contract was awarded, including evaluating any cost overruns or delayed completions.

This bill:

1. Requires an awarding department to conduct a post-evaluation of each contract for the acquisition of IT services totaling $5,000 or more that it executes.
2. Requires an awarding department to evaluate the performance of the contractor based on objective facts and with the support of program and contract performance data, within 60 days of the completion of the contract.
3. Requires DGS to develop, in consultation with CDT, and requires each department to use, a standard form or forms that contain objective postevaluation factors or metrics, as specified.
4. Requires each awarding department to report on all of the following:
   1. Whether the contracted work was completed within the time specified in the contract.
   2. Whether the contracted work was completed within the budget specified in the contract.
   3. Factors outside the control of the contractor that caused difficulties in contractor performance.
   4. Other information that CDT or DGS may require.
5. Provides that if the contractor’s performance was judged unsatisfactory on any of the factors or metrics, the postevaluation shall be considered unsatisfactory, as specified.
6. Requires postevaluations to remain on file at the offices of the awarding department for a period of 36 months following contract completion, and requires an awarding department to send a copy of the form to CDT within five working days of the completion of the postevaluation.
7. If the contractor did not satisfactorily perform the work specified in the contract, the department conducting the postevaluation shall place one copy of the postevaluation form in the department’s contract file and, if the department is not DGS, send one copy of the form to DGS within five working days.
8. Requires an awarding department, upon filing an unsatisfactory postevaluation or sending a copy to CDT, to notify and send a copy of the postevaluation to the contractor within 15 days.
9. Authorizes a contractor to comment on a negative postevaluation. Comments made pursuant to this authorization shall be attached to and filed with the copies of the postevaluation.
10. Requires a public official who signs a postevaluation to confirm its accuracy.

Background

Purpose of the bill. According to the author’s office, “every year, California spends millions of dollars on important IT projects that help modernize state departments and the services they provide. With these massive projects, California agencies routinely rely on third party contractors. While many of these projects are completed as planned, there are a number of examples where projects have surpassed the agreed upon budget or finished late which creates costs that are ultimately passed on to the taxpayers. Currently, existing law does not require state departments to conduct postevaluations after a project is completed.”

Further, the author’s office states that “this bill will create more accountability by requiring an awarding department to conduct a postevaluation after an IT project is finished. Through establishing a postevaluation system for certain IT projects, departments will have a thorough record of contractor performance to reference for future projects. This will allow departments to make more informed decisions and will create more transparency and accountability surrounding the state’s IT projects.”

Contracts for consulting services. Current law requires a state agency awarding a consulting service contract of $5,000 or more to document the performance of the contractor after the contract is complete. If the contractor does not satisfactorily perform the work or service specified in the contract, the agency conducting the postevaluation is required to keep a copy of the unsatisfactory evaluation form and then send it to DGS. Before awarding such a contract, an agency must review a prospective contractor’s prior performance evaluations by checking with DGS to determine if any unsatisfactory postevaluations are on file.

Once an agency forwards an unsatisfactory evaluation to DGS, it must then notify and send a copy of it to the contractor within 15 days. The contractor is allowed 30 days to submit a written response which must then be part of the evaluation maintained in both the agency’s and DGS’ files. The State Contracting Manual specifies that these postevaluations and the contractor responses on file with the agency and DGS are not public records.

Existing law requires all contracts for the acquisition of IT goods and services related to IT projects to be made by or under the supervision of CDT, and requires all other contracts for the acquisition of IT goods or services to be made by or under the supervision of DGS. Under existing law, both CDT and DGS are authorized to delegate their authority to another agency. This bill sets up a substantially similar process for evaluating each contract for the acquisition of IT services totally $5,000 or more by the awarding department. Additionally, this bill requires DGS, in consultation with CDT, to develop a standard form or forms that contain objective postevaluation factors or metrics for each awarding department to utilize.

In support of the bill, the author’s office cites a recent Sacramento Bee article which details a number of “failed tech projects that come in late and over budget,” including: a $100 million government computer program that doubled the time it takes to license California nurses; a $290 million tax software upgrade that made it more difficult to file taxes online; and, and $900 million accounting system the state has been working on for 14 years which is now causing delays that threaten to impact the state’s credit rating.

The author’s office believes that by requiring departments to conduct postevaluations on IT projects, DGS and CDT will have a record of information regarding contractors and past performances that can serve departments as a tool to make more informed decisions in the future.

Prior/Related Legislation

AB 572 (Kalra, 2019) would establish the Deforestation-Free Procurement Act and require a contractor that is contracting with a state agency for the procurement of products comprised of forest-risk commodities to certify that the commodities were not grown, derived, harvested, reared, or produced on land where tropical deforestation occurred. (Pending in the Senate Governmental Organization Committee)

AB 2304 (Davis, Chapter, Statutes of 2000) combined then separate statutes governing consulting services and personal services contract procedures, as specified.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received

ASSEMBLY THIRD READING

ATR Bill Id:AB 971

Author:(Salas)

As Amended Ver:May 16, 2019

Majority vote

SUMMARY:

Provides for the post-evaluation of contractors that provide information technology (IT) services to the state of $5,000 or more.

Major Provisions

Requires each state department to conduct a post-evaluation of each contract for the acquisition of IT services totaling $5,000 or more that it executes.

Directs each department to evaluate the performance of the contractor after completing the work specified in the contract and base the post-evaluation on objective facts and contract performance data.

Requires the Department of General Services (DGS) to develop, and state departments to use, a standard form that contains evaluation factors and a rating scale that designates the contractor's work as satisfactory or unsatisfactory.

Provides that the public official who signs the post-evaluation must certify its accuracy under penalty of perjury.

Directs each department to report specified information in the post-evaluation and requires the post-evaluation to be prepared within 60 days of completion of the contract.

Provides that the post-evaluation must remain on file at the office of the awarding department for 36 months and requires unsatisfactory post-evaluations to be sent to DGS within five working days.

Requires the department, upon sending the unsatisfactory post-evaluation to DGS, to notify and send a copy to the contractor within 15 days.

Allows a contractor to comment on an unsatisfactory post-evaluation and requires the contractor's response to be attached and filed with it.

Defines "department" for purposes of this bill to mean the California Department of Technology (CDT), DGS, and any other agency with delegated authority to contract for the acquisition of IT services.

COMMENTS:

Current law requires a state agency awarding a consulting service contract of $5,000 or more to document the performance of the contractor after the contract is complete. If the contractor does not satisfactorily perform the work or service specified in the contract, the agency conducting the post-evaluation is required to keep a copy of the unsatisfactory evaluation form and then send it to DGS. Before awarding such a contract, an agency must review a prospective contractor's prior performance evaluations by checking with DGS to determine if any unsatisfactory post-evaluations are on file.

Once an agency forwards an unsatisfactory evaluation to DGS, it must then notify and send a copy of it to the contractor within 15 days. The contractor is allowed 30 days to submit a written response which must then be part of the evaluation maintained in both the agency's and DGS' files.

This bill sets up a similar post-evaluation framework for contractors providing state IT services of $5,000 or more.

According to the Author:

This bill is intended to establish contractor accountability for state IT projects and is similar to current law governing post-evaluations of contractors who provide consulting services to the state.

Arguments in Support:

None on file.

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee:

1. Estimated ongoing costs of $278,000 (special funds) to the CDT for workload associated with post-evaluation of contractors.
2. Minor and absorbable costs to the DGS for developing a standard contractor evaluation form for use by each department and for collecting and maintaining unsatisfactory post-evaluations.
3. Unknown, likely minor costs to other awarding departments, including DGS, for completing contractor evaluations.

VOTES:

ASM ACCOUNTABILITY AND ADMINISTRATIVE REVIEW: 7-0-0

YES: Petrie-Norris, Patterson, Burke, Lackey, Medina, Quirk-Silva, Smith

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: May 16, 2019

CONSULTANT: Cassie Royce / A. & A.R. / (916) 319-3600 FN: 0000611

Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 971

Author:(Salas) – As Amended Ver:April 22, 2019

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

SUMMARY:

This bill requires departments awarding contracts for state information technology (IT) services of $5,000 or more to conduct a post-evaluation of each contract and allows IT contractors to receive bonus payments for completing projects early and under budget.

FISCAL EFFECT:

1. Estimated ongoing costs of $278,000 (special funds) to the Department of Technology for workload associated with post-evaluation of contractors.
2. Minor and absorbable costs to the Department of General Services (DGS) for developing a standard contractor evaluation form for use by each department and for collecting and maintaining unsatisfactory post-evaluations.
3. Unknown, likely minor costs to other awarding departments, including DGS, for completing contractor evaluations.
4. Unknown costs, potentially significant, to awarding departments for increased contract costs due to the availability of contractor bonuses. The bill does not specify an award amount and it is unknown how often such a bonus would be paid.

COMMENTS:

1. Purpose. According to the author, this bill is intended to establish contractor accountability for state IT projects and is similar to current law governing post-evaluations of contractors who provide consulting services to the state.
2. Background. Existing law requires a state agency awarding a consulting service contract of $5,000 or more to document the performance of the contractor after the contract is complete. If the contractor does not satisfactorily perform the work or service specified in the contract, the agency conducting the post-evaluation is required to keep a copy of the unsatisfactory evaluation form and then send it to DGS. Before awarding such a contract, an agency must review a prospective contractor’s prior performance evaluations by checking with DGS to determine if any unsatisfactory post-evaluations are on file.

Once an agency forwards an unsatisfactory evaluation to DGS, it must then notify and send a copy of the evaluation to the contractor within 15 days. The contractor is allowed 30 days to submit a written, response which must then be part of the evaluation maintained in both the agency’s and DGS’ files. The State Contracting Manual specifies these post-evaluations and the contractor responses on file with the agency and DGS are not public records.

This bill applies similar requirements to IT contracts. In addition, this bill allows an IT contract to provide for bonus payments to contractors for completing projects early and under budget. Any such provisions must be clearly specified in the contract.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081