BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2548|
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THIRD READING
Bill No: AB 2548
Author: Cox (R), et al
Amended: 8/18/00 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 6/27/00
AYES: Bowen, Alarcon, Hughes, Kelley, Mountjoy, Murray,
Solis, Vasconcellos
ASSEMBLY FLOOR : 72-3, 5/18/00 - See last page for vote
SUBJECT : Municipal utility districts: purchases
SOURCE : Sacramento Municipal Utility
DIGEST : This bill authorizes a municipal utility
district to procure supplies and materials on the basis of
"best value at lowest cost" criteria.
Senate Floor Amendments of 8/18/00 are clarifying - they
add specificity to the reporting requirement by requiring
the report to include an analysis of the effect on small
businesses, minority-owned businesses, and new businesses.
ANALYSIS : Current law requires municipal utility
districts (MUDs) to award contracts for supplies and
materials to the lowest responsible bidder for contracts of
more than $25,000 (in districts with populations over
250,000, the law applies to contracts over $50,000). This
dollar level is adjusted annually to reflect U.S.
Department of Commerce price indicators for state and local
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government purchases.
This bill allows MUDs to use a "best value at lowest cost"
criteria to award contracts, allowing districts to consider
factors other than cost when awarding supply and material
contracts over $50,000.
This bill defines "best value" as any factor or criterion
established by an MUD to ensure that its business needs and
goals are effectively met and that it obtains the most
value for an authorized acquisition.
This bill requires the MUD using a "best value" bidding
process to ensure that all businesses have an ability to
bid on a contract and that the contract doesn't
discriminate against a bidder or potential bidder.
This bill requires that once an MUD adopts a best value
procurement process, it must submit a report to the
Legislature, as prescribed, on or before January 1, 2004.
The provisions of the bill would be repealed January 1,
2005.
Background
The current process for letting contracts over $25,000 (for
larger districts, it's contract over $50,000) requires the
utility to put out a request for proposals (RFP) that
describes the supplies or materials needed, deadlines, and
any other relevant information required for the development
of a bid. Vendors respond to the RFP with an offer to
provide those goods for a specific price. These bids are
evaluated by the MUD's elected board and under existing
law's "lowest responsible bidder" criteria, the vendor with
the lowest price is awarded the contract.
This bill would allow MUDs to use something known as the
"best value at lowest cost" procurement process. Under
this proposal, vendors responding to an RFP wouldn't just
be judged on price, they'd be judged on a number of
criteria laid out in the bill.
Under this bill, the best value acquisition policies
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adopted by any MUD board must, at a minimum, consider:
1.Price and service levels which reduce operating costs.
2.Supplies and materials standards.
3.A procedure to resolve protests from vendors.
Once the MUD board establishes its policies, any best value
acquisition may, but is not required to, take into account
the following:
1.The total cost of the contract.
2.The operational cost or benefit of the contract.
3.The value of any vendor-added services.
4.The quality, effectiveness, and innovation of supplies,
materials, and services.
5.The reliability of delivery and installation schedules.
6.The terms and conditions of product warranties and vendor
guarantees.
7.The financial stability of the vendor.
8.The vendor's quality assurance program.
9.The vendor's experience.
10.The vendor's consistency of the proposed supplies with
the district's overall procurement program.
11.The economic benefits to the general community,
including job creation or retention.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/18/00)
Sacramento Municipal Utility District (source)
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California Municipal Utilities Association
ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Ashburn, Bates, Battin,
Baugh, Bock, Brewer, Briggs, Calderon, Campbell,
Cardenas, Cardoza, Cedillo, Corbett, Correa, Cox,
Cunneen, Davis, Dickerson, Dutra, Firebaugh, Florez,
Floyd, Gallegos, Granlund, Havice, Honda, House, Jackson,
Keeley, Knox, Kuehl, Leach, Lempert, Leonard, Longville,
Lowenthal, Machado, Maddox, Maldonado, Margett, Mazzoni,
Migden, Nakano, Olberg, Oller, Robert Pacheco, Rod
Pacheco, Papan, Pescetti, Reyes, Romero, Runner, Scott,
Shelley, Steinberg, Strickland, Thompson, Thomson,
Torlakson, Villaraigosa, Vincent, Washington, Wayne,
Wesson, Wiggins, Wildman, Wright, Zettel, Hertzberg
NOES: Baldwin, Kaloogian, McClintock
NC:sl 8/21/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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