BILL ANALYSIS Ó
AB 975
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
975 (Frazier) - As Amended May 4, 2015
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| |Education | |7 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill prohibits local public agencies and school districts
from disqualifying prospective bidders on public works contracts
through its uniform system of rating bidders, based solely on
AB 975
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whether a prospective bidder has filed a claim against a project
owner through the courts, mediation, or arbitration.
FISCAL EFFECT:
Unknown, likely very minor and non-reimbursable costs to local
agencies and school districts to modify an optional
prequalification process.
COMMENTS:
1)Purpose. According to the author, "AB 975 is intended to
address a troubling trend involving public works construction
pre-qualification questionnaires. Specifically, a number of
public agencies have begun disqualifying, or significantly
penalizing through their pre-qualification process, any
contractor who has been involved, or is involved, in any claim
with a public agency.
2)Background. The Local Agency Public Construction (LAPC) Act
applies to all cities, counties and special districts, and
allows, but does not require, public agencies to establish a
process to evaluate and pre-qualify prospective bidders on
public works projects. An agency may choose to require
prospective bidders to submit a standardized questionnaire and
a financial statement, which includes the prospective bidder's
experience in performing public works. If the agency selects
this procedure, it must adopt a uniform rating system to
determine the minimum requirements permitted for qualification
to bid and the type and size of contracts for which each
bidder is eligible to bid. It also must offer an appeals
process to allow prospective bidders to dispute their proposed
pre-qualification rating.
AB 975
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The LAPC Act directs the Department of Industrial Relations
(DIR) to develop a model questionnaire and guidelines for a
uniform rating system that can be used by public agencies.
The DIR questionnaire requires contractors to provide detailed
information regarding the company and its financial status,
including whether the company has been in bankruptcy or
involved in a civil lawsuit, licensing information, prior
contracting experience (whether the contractor has completed
other public works projects), whether the contractor has been
involved or been found to have violated any federal, state or
local laws, and whether the contractor has violated any labor
and health and safety laws, including prevailing wage.
Like other local agencies, school districts have the option to
evaluate and pre-qualify prospective bidders on public works
projects. This includes the flexibility to design the
prequalification questionnaire as they deem appropriate, as
long as the questionnaire covers the issues contained in a
model questionnaire designed by the DIR.
3)Related Legislation. AB 566 (O'Donnell), pending referral in
the Senate, requires, until January 1, 2019, school districts
to require prospective bidders on public contracts to submit a
pre-qualification questionnaire and financial statement, if
the expenditure of the project is $1 million or more,
regardless of the funding source, and the ADA of the school
district is more than 2,500 (among other provisions).
4)Previous Legislation. AB 1581 (Buchanan), Chapter 408,
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Statutes of 2014, required, until January 1, 2019, school
districts entering into lease/leaseback or lease-to-own
contracts to require prospective bidders to submit a
pre-qualification questionnaire and financial statement, if
the project is funded with state bond funds, the expenditure
of the project is
$1 million or more, and the ADA of the school district is more
than 2,500.
a) AB 1565 (Fuentes), Chapter 808, Statutes of 2012,
required, beginning with contracts awarded on or after
January 1, 2014 and until January 1, 2019, school districts
to require prospective bidders on public contracts to
submit a pre-qualification questionnaire and financial
statement, if the project is funded with state bond funds,
the expenditure of the project is $1 million or more, and
the ADA of the school district is more than 2,500.
b) AB 281 (Burmudez) of 2003 would have prohibited the
bidder pre-qualification form that is required under the
LAPC Act from disqualifying a bidder solely based on the
bidder's financial capacity, provided that the bidder
otherwise qualifies for the public works contract. This
bill was referred to the Assembly Local Government
Committee, but was never heard.
c) AB 574 (Hertzberg), Chapter 972, Statutes of 1999,
defined the term "responsible bidder" as it relates to
public contracts, authorized public entities to require
prospective bidders to complete pre-qualification
questionnaires and financial statements, and required DIR
to develop a model questionnaire and guidelines for rating
bidders.
AB 975
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d) AB 611 (Villaraigosa), Chapter 390, Statutes of 1997,
allowed school districts to pre-qualify bidders on a
quarterly basis and allowed the pre-qualification to be
valid for up to one calendar year.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081