BILL NUMBER: SB 762 AMENDED BILL TEXT AMENDED IN SENATE APRIL 15, 2015 INTRODUCED BY Senator Wolk FEBRUARY 27, 2015 An act to add Article 3.7 (commencing with Section 20155) to Chapter 1 of Part 3 of Division 2 of the Public Contract Code, relating to public contracts. LEGISLATIVE COUNSEL'S DIGEST SB 762, as amended, Wolk. Counties: competitive bidding: best value: pilot program. The Local Agency Public Construction Act requires counties, among others, to comply with specified procedures for contracting for public works projects, including, the use of a competitive bidding process and awarding contracts to the lowest responsible bidder. Existing law provides that specified provisions of the act applicable to public works contracts awarded by counties, as specified, do not apply to certain contracts by the County of Napa and the County of San Diego. This bill would establish a pilot program to allow counties to select the lowest responsible bidder on the basis of best value, asdefined. Thisdefined, for construction projects in excess of $1,000,000. The bill would require that bidders verify specified information under oath, thereby imposing a state-mandated local program by creating a new crime. 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 no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Article 3.7 (commencing with Section 20155) is added to Chapter 1 of Part 3 of Division 2 of the Public Contract Code, to read: Article 3.7. Best Value Construction Contracting for Counties Pilot Program 20155. (a) This article provides for a pilot program for countieswhen awarding construction contracts.for construction projects in excess of one million dollars ($1,000,000). (b) The board of supervisors of any county shall let any contract for a construction project pursuant to this article to the lowest responsible bidder or else reject all bids. (c) The lowest responsible bidder may be selected on the basis of the best value to a county. In order to implement this method of selection, the board of supervisors shall adopt and publish procedures and required criteria that ensure that all selections are conducted in a fair and impartial manner. These procedures shall conform to Sections 20155.2 and 20155.3 and shall be mandatory for counties who choose to participate in the pilot program. (d) If the board of supervisors deems it to be in the best interest of the county, the board ofsupervisors may,supervisors, on the refusal or failure of the successful bidder for a project to execute a tendered contract, may award it to the second lowest responsible bidder. If the second lowest responsible bidder fails or refuses to execute the contract, the board of supervisors may likewise award it to the third lowest responsible bidder. 20155.1. As used in this article: (a) "Best value" means a procurement process whereby the lowest responsible bidder may be selected on the basis of objective criteria with the resulting selection representing the best combination of price and qualifications. (b) "Best value contract" means a contract entered into pursuant to this article. (c) "Best value contractor" means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract. (d) "Demonstrated management competency" means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity. (e) "Financial condition" means the financial resources needed to perform the contract. The criteria used to evaluate a bidder's financial condition shall include, at a minimum, capacity to obtain all required payment bonds, performance bonds, and liability insurance. (f) "Labor compliance" means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidder's labor compliance shall include, as a minimum, the bidder's ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with those requirements, and its past conformance with requirements to pay prevailing wages on public works projects. (g) "Qualifications" means the financial condition, relevant experience, demonstrated management competency, labor compliance, the safety record of the bidder, and, if required by the bidding documents, some or all of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work. (h) "Relevant experience" means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity. (i) "Safety record" means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidder's safety record shall include, at a minimum, its experience modification rate for the most recent three-year period, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period. 20155.2. A county shall proceed in accordance with the following when awarding best value contracts under this article: (a) A county shall prepare a solicitation for bids and give notice pursuant to Section 20125. (b) A county shall establish a procedure to prequalifybidders.bidders pursuant to Section 20101. The information required pursuant to this section shall be verified under oath by the bidder in the manner in which civil pleadings in civil actions are verified. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). (c) Each solicitation for bids shall do all of the following: (1) Invite prequalified bidders to submit sealed bids in the manner prescribed by this article. (2) Include a section identifying and describing the following: (A) Criteria that a county will consider in evaluating bids. (B) The methodology and rating or weighting system that will be used by a county in evaluating bids. (C) The relative importance or weight assigned to the criteria identified in the request for bids. (d) Final evaluation of the best value contractor shall be done in a manner that prevents cost or price information from being revealed to the committee evaluating the qualifications of the bidders prior to completion and announcement of that committee's decision. 20155.3. Selection of the best value contractor shall be made as follows: (a)AAn evaluation committee appointed by the county shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualifications score to each bid. (b) A county shall not award a contract for a construction project pursuant to this article if a solicitation for bids for that construction project results in the submission of fewer than three responsive bids to the county for evaluation.(b)(c) The award of the contract shall be made to the bidder whose bid is determined by a county, in writing, to be the best value to a county. To determine the best value contractor, the county shall divide each bidder's price by its qualifications score. The lowest resulting cost per quality point will represent the best value bid.(c)(d) A county shall issue a written decision of its contract award.(d)(e) Upon issuance of a contract award, a county shall publicly announce its award identifying the best value contractor to which the award is made, the project, the project price, and the selected best value contractor's score based on the evaluation criteria listed in the request for bids. The notice of award shall be made public and include the score of the selected best value contractor in relation to all other responsive bidders and their respective prices. The contract file shall include documentation sufficient to support the decision to award. 20155.4. (a)On or beforeBefore January 1, 2020, the board of supervisors of a participating county shall submit a report to the appropriate policy committees of the Legislature and the Joint Legislative Budget Committee. The report shall include, but is not limited to, the following information: (1) A description of the projects awarded using the best value procedures. (2) The contract award amounts. (3) The best value contractors awarded the projects. (4) A description of any written protests concerning any aspect of the solicitation, bid, or award of the best value contracts, including the resolution of the protests. (5) A description of the prequalification process. (6) The criteria used to evaluate the bids, including the weighting of the criteria and an assessment of the effectiveness of the methodology. (7) If a project awarded under this article has been completed, an assessment of the project performance, to include a summary of any delays or cost increases. (b) A report submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code. (c) This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date. 20155.5. Except as otherwise provided in this article, this article is not intended to change in any manner any guideline, criteria, procedure, or requirement of a county to let any contract for a project to the lowest responsible bidder or else reject all bids. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.