BILL ANALYSIS
AB 2548
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ASSEMBLY THIRD READING
AB 2548 (Cox)
As Amended May 15, 2000
Majority vote
UTILITIES & COMMERCE 9-0 LOCAL
GOVERNMENT 9-0
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|Ayes:|Wright, Pescetti, |Ayes:|Longville, Robert |
| |Cardenas, Frusetta, | |Pacheco, Corbett, |
| |Maddox, Mazzoni, Papan, | |Kaloogian, Kuehl, |
| |Reyes, Wesson | |Thompson, Thomson, |
| | | |Torlakson, Wiggins |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Authorizes a municipal utility district (MUD) to
procure supplies and materials on the basis of best value
criteria. Specifically, this bill :
1)Authorizes the MUD board to purchase supplies and materials,
when the expenditure exceeds $50,000, in accordance with best
value acquisition policies adopted by the board.
2)Permits the board to authorize the general manager to act for
the board in determining a best value bidder in accordance
with best value acquisition policies and to award a contract
to that bidder.
3)Defines best value acquisition as a competitive procurement
process that may take into consideration any of the following
factors:
a)The total cost to the MUD of its use or consumption of
supplies and materials;
b)The operational cost or benefit incurred by the MUD as a
result of contract award;
c)The value to the MUD of value-added services;
d)The quality, effectiveness, and innovation of supplies,
materials and services;
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e)The reliability of delivery or installation schedules;
f)The terms and conditions of product warrantees and vendor
guarantees;
g)The vendor's financial stability, quality assurance
program, and experience with the provision of supplies,
material, and services; and,
h)The consistency of the vendor's proposed supplies,
materials, and services with the district's overall
supplies and material procurement program.
4)Requires MUDs that adopt best value acquisition policies to
submit a report to the Legislature not later than three years
from the date on which the MUD commences those procurement
practices. The report shall include a summary of the costs
and benefits of best value acquisition compared to traditional
low bid procurement practices, the effect of best value
procurement practices on small businesses, the nature of any
disputes arising from the use of best value procurement
practices, and the status of those disputes.
EXISTING LAW :
1)Authorizes MUDs to provide a variety of utility services,
including electricity, water, sewage and garbage disposal,
lighting, transportation, and communications.
2)Provides that the purchase of all supplies and materials, by
any MUD with a population of 250,000 or more, when the
required expenditure exceeds $50,000, shall be let by contract
to the lowest responsible bidder. For all other MUDs,
expenditures in excess of $25,000 shall be by contract let to
the lowest responsible bidder.
3)Provides that the dollar limits shall annually be adjusted to
reflect the percentage change in the Implicit Price Deflator
for state and local government purchases of goods and
services, as published by the United States Department of
Commerce.
FISCAL EFFECT : Unknown
COMMENTS : There are five MUDs in California: 1) East Bay MUD;
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2) Lassen MUD; 3) Sacramento MUD (SMUD); 4) South Placer MUD;
and, 5) Southern San Joaquin MUD. Each MUD is governed by an
elected board of directors and a general manager appointed by
the board.
When purchasing supplies and materials, MUDs are required to
solicit bids and award contracts to the lowest responsible
bidder when the expenditure exceeds $25,000. For MUDs with
populations in excess of 250,000 the bidding threshold is
$50,000.
This bill authorizes a MUD to purchase supplies and materials on
the basis of best value criteria, as defined. The utilization
of the best value process would be at the discretion of the
board of directors and may be delegated to the general manager.
The specific criteria for best value procurement would require
board approval.
The best value procurement process is similar to the lowest
responsible bidder process insofar as it includes the
development of a solicitation, and a Request for Proposal (RFP)
with minimum requirements and evaluation factors. The key
difference is that vendors are selected because they provide the
best overall value, and not simply the lowest price for the
commodity. The evaluation criteria for best value procurement
may include: 1) total cost of ownership, including price; 2)
service levels and reliability of supply; 3) quality and
innovation of supply; 4) vendor-provided value-added services;
and, 5) supplier development programs.
This bill would provide MUDs with statutory authority to use
best value procurement practices to enter into strategic
alliances with vendors of supplies and materials in order to
reduce operating costs and improve overall operating
efficiencies.
This bill requires MUDs that adopt best value acquisition
policies to submit a report to the Legislature within three
years of the date the MUD commences those procurement practices.
The report would include a summary of the costs and benefits of
best value acquisition compared to traditional low bid
procurement practices, the effect of best value procurement
practices on small businesses, the nature of any disputes
arising from the use of best value procurement practices, and
the status of those disputes.
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Analysis Prepared by : Joseph Lyons / U. & C. / (916) 319-2083
FN: 0004512