Amended in Assembly May 4, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 975


Introduced by Assembly Member Frazier

February 26, 2015


An act to amend Sections 20101, 20111.5, and 20111.6 of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

AB 975, as amended, Frazier. Local Agency Public Construction Act: bid criteria.

The Local Agency Public Construction Actbegin delete authorizes the governing board of any school district, without advertising for bids, to authorize any public corporation or agency, including any county, city, town, or district, to lease data-processing equipment, and to purchase materials, supplies, equipment, automotive vehicles, tractors, and other personal property for the district, as provided.end deletebegin insert sets forth the requirements for competitive bidding on various types of contracts awarded by state and local agencies, including a school district.end insert The actbegin delete requiresend deletebegin insert authorizes a public entity or school district to requireend insert prospective bidders for a construction contract to complete and submit to the governing board a prequalification questionnaire and financial statement, and requires the board to adopt and apply a uniform system of rating bidders on the basis of completed questionnaires and financial statements.

This bill would also prohibit a publicbegin delete agency,end deletebegin insert agency or school districtend insert under the act, from disqualifyingbegin delete or penalizingend delete a prospective bidder basedbegin delete on the bidder’s involvement in an affirmativeend deletebegin insert solely on whether the prospective bidder filed aend insert claimbegin delete filed by the project owner or the fact that the bidder has filed a claim against a project owner, unless the claim is based upon a violation of the Labor Code or has been finally adjudicated and the settlement or award provided on the final judgment or settlement is greater than 20% of the adjusted contract amount against the prospective bidder.end deletebegin insert against a project owner.end insert

Because this bill would impose new requirements on the governing body of a local school board, it would impose a state-mandated local program.

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 these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 20101 of the Public Contract Code is
2amended to read:

3

20101.  

(a) Except as provided in Section 20111.5, a public
4entity subject to this part may require that each prospective bidder
5for a contract complete and submit to the entity a standardized
6questionnaire and financial statement in a form specified by the
7entity, including a complete statement of the prospective bidder’s
8experience in performing public works. The standardized
9questionnaire may not require prospective bidders to disclose any
10violations of Chapter 1 (commencing with Section 1720) of Part
117 of Division 2 of the Labor Code committed prior to January 1,
121998, if a violation was based on a subcontractor’s failure to
13comply with these provisions and the bidder had no knowledge of
14the subcontractor’s violations. The Department of Industrial
15Relations, in collaboration with affected agencies and interested
16parties, shall develop model guidelines for rating bidders, and draft
17the standardized questionnaire, that may be used by public entities
18for the purposes of this part. The Department of Industrial
19Relations, in developing the standardized questionnaire, shall
P3    1consult with affected public agencies, cities and counties, the
2construction industry, the surety industry, and other interested
3parties. The questionnaire and financial statement shall be verified
4under oath by the bidder in the manner in which civil pleadings in
5civil actions are verified. The questionnaires and financial
6statements shall not be public records and shall not be open to
7public inspection; however, records of the names of contractors
8applying for prequalification status shall be public records subject
9to disclosure under Chapter 3.5 (commencing with Section 6250)
10of Division 7 of Title 1 of the Government Code.

11(b) Any public entity requiring prospective bidders to complete
12and submit questionnaires and financial statements, as described
13in subdivision (a), shall adopt and apply a uniform system of rating
14bidders on the basis of the completed questionnaires and financial
15statements, in order to determine both the minimum requirements
16permitted for qualification to bid, and the type and size of the
17contracts upon which each bidder shall be deemed qualified to bid.
18The uniform system of rating prospective bidders shall be based
19on objective criteria.

20(c) A public entity may establish a process for prequalifying
21prospective bidders pursuant to this section on a quarterly basis
22and a prequalification pursuant to this process shall be valid for
23one calendar year following the date of initial prequalification.

24(d) Any public entity requiring prospective bidders on a public
25works project to prequalify pursuant to this section shall establish
26a process that will allow prospective bidders to dispute their
27proposed prequalification rating prior to the closing time for receipt
28of bids. The appeal process shall include the following:

29(1) Upon request of the prospective bidder, the public entity
30shall provide notification to the prospective bidder in writing of
31the basis for the prospective bidder’s disqualification and any
32supporting evidence that has been received from others or adduced
33as a result of an investigation by the public entity.

34(2) The prospective bidder shall be given the opportunity to
35rebut any evidence used as a basis for disqualification and to
36present evidence to the public entity as to why the prospective
37bidder should be found qualified.

38(3) If the prospective bidder chooses not to avail itself of this
39process, the proposed prequalification rating may be adopted
40without further proceedings.

P4    1(e) For the purposes of subdivision (a), a financial statement
2shall not be required from a contractor who has qualified as a Small
3Business Administration entity pursuant to paragraph (1) of
4subdivision (d) of Section 14837 of the Government Code, when
5the bid is no more than 25 percent of the qualifying amount
6provided in paragraph (1) of subdivision (d) of Section 14837 of
7the Government Code.

8(f) Nothing in this section shall preclude an awarding agency
9from prequalifying or disqualifying a subcontractor. The
10disqualification of a subcontractor by an awarding agency does
11not disqualify an otherwise prequalified contractor.

begin delete

15 12(1)

end delete

13begin insert(g)end insert Any public agency requiring prospective bidders to complete
14and submit questionnaires shall not disqualifybegin delete or otherwise penalizeend delete
15 a prospective bidder through its uniform system of rating bidders
16basedbegin delete on either of the following:end deletebegin insert solely on whether a prospective
17bidder has filed a claim against a project owner through the courts,
18mediation, or arbitration.end insert

begin delete

19(A) A prospective bidder is or has been involved in an
20affirmative claim filed by a project owner through the courts,
21mediation, or arbitration.

22(B) A prospective bidder has filed a claim through the courts,
23mediation, or arbitration against a project owner.

24(2) (A) For purposes of this subdivision, “affirmative claim”
25or “claim” does not include any claim based on a violation of the
26Labor Code.

27(B) Nothing in this subdivision precludes a public agency from
28including in its uniform system of rating bidders criteria related
29to affirmative claims that have been finally adjudicated or settled,
30provided the settlement or final judgment or award on the
31affirmative claim is greater than 20 percent of the adjusted contract
32amount against the prospective bidder.

end delete
33

SEC. 2.  

Section 20111.5 of the Public Contract Code is
34amended to read:

35

20111.5.  

(a) The governing board of the district may require
36that each prospective bidder for a contract, as described under
37Section 20111, complete and submit to the district a standardized
38questionnaire and financial statement in a form specified by the
39district, including a complete statement of the prospective bidder’s
40financial ability and experience in performing public works. The
P5    1questionnaire and financial statement shall be verified under oath
2by the bidder in the manner in which civil pleadings in civil actions
3are verified. The questionnaires and financial statements shall not
4be public records and shall not be open to public inspection.

5(b) Any school district requiring prospective bidders to complete
6and submit questionnaires and financial statements, as described
7in subdivision (a), shall adopt and apply a uniform system of rating
8bidders on the basis of the completed questionnaires and financial
9statements, in order to determine the size of the contracts upon
10which each bidder shall be deemed qualified to bid.

11(c) Each prospective bidder on any contract described under
12Section 20111 shall be furnished by the school district letting the
13contract with a standardized proposal form that, when completed
14and executed, shall be submitted as his or her bid. Bids not
15presented on the forms so furnished shall be disregarded.

16(d) A proposal form required pursuant to subdivision (c) shall
17not be accepted from any person or other entity who is required
18to submit a completed questionnaire and financial statement for
19prequalification pursuant to subdivision (a), but has not done so
20at least five days prior to the date fixed for the public opening of
21sealed bids or has not been prequalified, pursuant to subdivision
22(b), for at least one day prior to that date.

23(e) Notwithstanding subdivision (d), any school district may
24establish a process for prequalifying prospective bidders pursuant
25to this section on a quarterly basis and may authorize that
26prequalification to be considered valid for up to one calendar year
27following the date of initial prequalification.

28(f) begin delete(1)end deletebegin deleteend deleteAnybegin delete public agencyend deletebegin insert school districtend insert requiring prospective
29bidders to complete and submit questionnaires shall not disqualify
30begin delete or otherwise penalizeend delete a prospective bidder through its uniform
31system of rating bidders basedbegin delete on either of the following:end deletebegin insert solely
32on whether a prospective bidder has filed a claim against a project
33owner through the courts, mediation, or arbitration.end insert

begin delete

34(A) A prospective bidder is or has been involved in an
35affirmative claim filed by a project owner through the courts,
36mediation, or arbitration.

37(B) A prospective bidder has filed a claim through the courts,
38mediation, or arbitration against a project owner.

P6    1(2) (A) For purposes of this subdivision, “affirmative claim”
2or “claim” does not include any claim based on a violation of the
3Labor Code.

4(B) Nothing in this subdivision precludes a public agency from
5including in its uniform system of rating bidders criteria related
6to affirmative claims that have been finally adjudicated or settled,
7provided the settlement or final judgment or award on the
8affirmative claim is greater than 20 percent of the adjusted contract
9amount against the prospective bidder.

end delete
10

SEC. 3.  

Section 20111.6 of the Public Contract Code is
11amended to read:

12

20111.6.  

(a) This section shall apply only to public projects,
13as defined in subdivision (c) of Section 22002, for which the
14governing board of the district uses funds received pursuant to the
15Leroy F. Greene School Facilities Act of 1998 (Chapter 12.5
16(commencing with Section 17070.10) of Part 10 of Division 1 of
17Title 1 of the Education Code) or any funds from any future state
18school bond for a public project that involves a projected
19expenditure of one million dollars ($1,000,000) or more.

20(b) If the governing board of the district enters into a contract
21meeting the criteria of subdivision (a), then the governing board
22of the district shall require that prospective bidders for a
23construction contract complete and submit to the board of the
24district a standardized prequalification questionnaire and financial
25statement. The questionnaire and financial statement shall be
26verified under oath by the bidder in the manner in which civil
27pleadings in civil actions are verified. The questionnaires and
28financial statements shall not be public records and shall not be
29open to public inspection.

30(c) The board of the district shall adopt and apply a uniform
31system of rating bidders on the basis of the completed
32questionnaires and financial statements. This system shall also
33apply to a person, firm, or corporation that constructs a building
34described in Section 17406 or 17407 of the Education Code.

35(d) The questionnaire and financial statement described in
36subdivision (b), and the uniform system of rating bidders described
37in subdivision (c), shall cover, at a minimum, the issues covered
38by the standardized questionnaire and model guidelines for rating
39 bidders developed by the Department of Industrial Relations
40pursuant to subdivision (a) of Section 20101.

P7    1(e) Each prospective bidder shall be furnished by the school
2district letting the contract with a standardized proposal form that,
3when completed and executed, shall be submitted as his or her bid.
4Bids not presented on the forms so furnished shall be disregarded.

5(f) A proposal form required pursuant to subdivision (e) shall
6not be accepted from any person or other entity that is required to
7submit a completed questionnaire and financial statement for
8prequalification pursuant to subdivision (b) or from any person or
9other entity that uses a subcontractor that is required to submit a
10completed questionnaire and financial statement for
11prequalification pursuant to subdivision (b), but has not done so
12at least 10 business days prior to the date fixed for the public
13opening of sealed bids or has not been prequalified for at least five
14business days prior to that date. The district may require the
15completed questionnaire and financial statement for
16prequalification to be submitted more than 10 business days prior
17to the fixed date for the public opening of sealed bids. The district
18may also require the prequalification more than five business days
19prior to the fixed date.

20(g) (1) The board of the district may establish a process for
21prequalifying prospective bidders pursuant to this section on a
22quarterly or annual basis and a prequalification pursuant to this
23process shall be valid for one calendar year following the date of
24initial prequalification.

25(2) The board shall establish a process to prequalify a person,
26firm, or corporation, including, but not limited to, the prime
27contractor and, if used, an electrical, mechanical, and plumbing
28subcontractor, to construct a building described in Section 17406
29or 17407 of the Education Code on a quarterly or annual basis. A
30prequalification pursuant to this process shall be valid for one
31calendar year following the date of initial prequalification.

32(h) This section shall not preclude the governing board of the
33district from prequalifying or disqualifying a subcontractor of any
34specialty classification described in Section 7058 of the Business
35and Professions Code.

36(i) For purposes of this section, bidders shall include both of
37the following:

38(1) A prime contractor, as defined in Section 4113, that is either
39of the following:

P8    1(A) A general engineering contractor described in Section 7056
2of the Business and Professions Code.

3(B) A general building contractor described in Section 7057 of
4the Business and Professions Code.

5(2) If utilized, each electrical, mechanical, and plumbing
6contractor, whether as a prime contractor or as a subcontractor, as
7defined in Section 4113.

8(j) If a public project covered by this section includes electrical,
9mechanical, or plumbing components that will be performed by
10electrical, mechanical, or plumbing contractors, a list of
11prequalified general contractors and electrical, mechanical, and
12plumbing subcontractors shall be made available by the school
13district to all bidders at least five business days prior to the dates
14fixed for the public opening of sealed bids. The district may require
15the list to be made available more than five business days prior to
16the fixed dates for the public opening of sealed bids.

17(k) For purposes of this section, electrical, mechanical, and
18plumbing subcontractors are contractors licensed pursuant to
19Section 7058 of the Business and Professions Code, specifically
20contractors holding C-4, C-7, C-10, C-16, C-20, C-34, C-36, C-38,
21C-42, C-43, and C-46 licenses, pursuant to regulations of the
22Contractors’ State License Board.

23(l) This section shall not apply to a school district with an
24average daily attendance of less than 2,500.

25(m) begin delete(1)end deletebegin deleteend deleteAnybegin delete public agencyend deletebegin insert school districtend insert requiring prospective
26bidders to complete and submit questionnaires shall not disqualify
27begin delete or otherwise penalizeend delete a prospective bidder through its uniform
28system of rating bidders basedbegin delete on either of the following:end deletebegin insert solely
29on whether a prospective bidder has filed a claim against a project
30owner through the courts, mediation, or arbitration.end insert

begin delete

31(A) A prospective bidder is or has been involved in an
32affirmative claim filed by a project owner through the courts,
33mediation, or arbitration.

34(B) A prospective bidder has filed a claim through the courts,
35mediation, or arbitration against a project owner.

36(2) (A) For purposes of this subdivision, “affirmative claim”
37or “claim” does not include any claim based on a violation of the
38Labor Code.

39(B) Nothing in this subdivision precludes a public agency from
40including in its uniform system of rating bidders criteria related
P9    1to affirmative claims that have been finally adjudicated or settled,
2provided the settlement or final judgment or award on the
3affirmative claim is greater than twenty percent of the adjusted
4contract amount against the prospective bidder.

end delete

5(n) (1) This section shall apply only to contracts awarded on
6or after January 1, 2014.

7(2) The amendments made to this section by the act adding this
8paragraph shall apply only to contracts awarded on or after January
91, 2015.

10(o) (1) On or before January 1, 2018, the Director of Industrial
11Relations shall (A) submit a report to the Legislature evaluating
12whether, during the years this section has applied to contracts,
13violations of the Labor Code on school district projects have
14decreased as compared to the same number of years immediately
15preceding the enactment of this section, and (B) recommend
16improvements to the system for prequalifying contractors and
17subcontractors on school district projects.

18(2) A report to be submitted pursuant to this subdivision shall
19be submitted in compliance with Section 9795 of the Government
20Code.

21(p) This section shall become inoperative on January 1, 2019,
22and, as of July 1, 2019, is repealed.

23

SEC. 4.  

If the Commission on State Mandates determines that
24this act contains costs mandated by the state, reimbursement to
25local agencies and school districts for those costs shall be made
26pursuant to Part 7 (commencing with Section 17500) of Division
274 of Title 2 of the Government Code.



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