BILL NUMBER: AB 2755AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 25, 2010 INTRODUCED BY Assembly Member Bonnie Lowenthal FEBRUARY 19, 2010 An act to amend Sections 130051.9, 130051.11, 130232, and 130242 of, to amend and renumber Section 130051.21 of, and to repeal Section 130243 of, the Public Utilities Code, relating to public contracts. LEGISLATIVE COUNSEL'S DIGEST AB 2755, as amended, Bonnie Lowenthal. Los Angeles County Metropolitan Transportation Authority: contracting. The County Transportation Commissions Act creates county transportation commissions or authorities in Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties, with specified powers and duties. Existing law, with respect to those agencies, generally requires purchase of all supplies, equipment, and materials, and the construction of all facilities and works, when the expenditure exceeds $25,000, to be by contract let to the lowest responsible bidder. Existing law contains various alternative provisions applicable solely to the Los Angeles County Metropolitan Transportation Authority. This bill would enact additional provisions applicable to the Los Angeles County Metropolitan Transportation Authority. It would require a contract to be let to the lowest responsible bidder when the purchase price of thecontractionconstruction of allfacilityfacilities exceeds $100,000, rather than $25,000. The bill would authorize the authority to award individual contracts , not exceeding $8,000,000 per year, providing for the issuance of job orders for construction work with compensation for the work based on unit prices, and would define "job order" and "unit price" for these purposes. The bill would authorize a contractor of the authority to enter into subcontracts with subcontractors that were not listed in the bid for the job order contract, as specified. Existing law requires the chief executive officer of the authority to approve and award all contracts for construction, which approval shall be based on the lowest responsible and responsive bid submitted. This bill would authorize the chief executive officer to delegate this authority as necessary for the administrative efficiency of the authority. Existing law authorizes the authority to enter into design-build contracts with private entities under which a single contract incorporates some or all of the planning, design, permitting, development, joint development, construction, construction management, acquisition, leasing, installation, and warranty of all or components of transit systems and facilities on real property owned or to be owned by the authority, subject to certain requirements. This bill would make various modifications to the requirements for design-build contracts. The bill would authorize the authority to delegate the preparation of supporting documents and findings, and award of contracts, under these provisions to an organizational unit of the authority. Existing law requires the inspector general of the authority to prepare a prequalification questionnaire to be completed by each construction company, engineering firm, consultant, legal firm, product vendor, or other business entity seeking to contract with the authority. This bill would instead require the questionnaire to be prepared by the authority with respect to business entities seeking to perform a public works project in excess of $5,000,000, and would only require the inspector general to review the questionnaire to ensure it solicits specified information. The bill would authorize the authority to prequalify prospective contractors and limit consideration of bids or proposals to prequalified contractors. Existing law requires the authority to adopt a specified change order procedure for contracts awarded by the authority. This bill would repeal these provisions. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 130051.9 of the Public Utilities Code is amended to read: 130051.9. (a) The Los Angeles County Metropolitan Transportation Authority shall appoint a full-time chief executive officer who shall act for the authority under its direction and perform those duties delegated by the authority. (b) The chief executive officer shall be appointed to a term of four years and shall be removed from office only upon the occurrence of one or both of the following: (1) A two-thirds majority of the members of the authority votes for removal. (2) The chief executive officer violates a federal or state law, regulation, local ordinance, or policy or practice of the authority, relative to ethical practices, including, but not limited to, the acceptance of gifts or contributions. (c) The chief executive officer shall approve and award all contracts for construction, and that approval shall be based upon the lowest responsible and responsive bid submitted. The chief executive officer may delegate this authority as necessary for the administrative efficiency of the authority. (d) The Los Angeles County Metropolitan Transportation Authority shall appoint a general counsel and board secretary. SEC. 2. Section 130051.11 of the Public Utilities Code is amended to read: 130051.11. (a) The Los Angeles County Metropolitan Transportation Authority may determine its organizational structure, which may include, but is not limited to, the establishment of departments, divisions, subsidiary units, or similar entities. Any department, division, subsidiary unit, or similar entity established by the authority shall be referred to in this chapter as an "organizational unit." The authority shall, at a minimum, establish the following organizational units: (1) A transit construction organizational unit to assume the construction responsibilities for all exclusive public mass transit guideway construction projects in Los Angeles County. (2) An operating organizational unit with the following responsibilities: (A) The operating responsibilities of the former Southern California Rapid Transit District on all exclusive public mass transit guideway projects in the County of Los Angeles. (B) The operation of bus routes operated by the former Southern California Rapid Transit District, and all the duties, obligations, and liabilities of the district relating to those bus routes. (3) A transportation planning and programming organizational unit with all planning responsibilities previously performed by the former Southern California Rapid Transit District and the former Los Angeles County Transportation Commission. (b) Nothing in this section shall be construed to require specific bus routes to be operated. The authority or the operating organizational unit may make any adjustment with respect to bus routes, bus services, or both, which is within the power of the former Los Angeles County Transportation Commission, or the former Southern California Rapid Transit District. (c) Any obligations of the former Southern California Rapid Transit District arising out of a collective bargaining agreement entered into by the district shall be the exclusive obligations of the Los Angeles County Metropolitan Transportation Authority. It is the intent of the Legislature that the rights or obligations under any collective bargaining agreement in existence on January 1, 1993, not be enlarged or diminished by this section or any other provision of the act which added this section. (d) No collective bargaining agreement entered into by the former Southern California Rapid Transit District on or after January 1, 1993, shall be effective unless approved by the Los Angeles County Metropolitan Transportation Authority. The authority's approval of an agreement shall cause the agreement to be binding upon the authority. (e) Any reference to the former Southern California Rapid Transit District in Article 10 (commencing with Section 30750) of Chapter 5 of Part 3 of Division 10 is deemed to refer to the Los Angeles County Metropolitan Transportation Authority. (f) The Los Angeles County Metropolitan Transportation Authority may administratively delegate to an organizational unit or to its chief executive officer any powers and duties it deems appropriate. Powers and duties that may be delegated to an organizational unit include, but are not limited to, the following: (1) The power of eminent domain. (2) Approval of contracts, except the final approval of labor contracts. (3) Hearing and resolving bid protests. (4) Preparation of supporting documents and findings, and approval of contracts, under Sections 130233, 130234, 130236, 130237, and 130242 within guidelines adopted by the board of directors. (g) The Los Angeles County Metropolitan Transportation Authority shall establish a citizens' advisory council pursuant to subdivision (d) of Section 130105. SEC. 3. Section 130051.21 of the Public Utilities Code, as added by Chapter 10 of the Statutes of 1996, is amended and renumbered to read: 130051.22. (a) The Los Angeles County Metropolitan Transportation Authority shall prepare a prequalification questionnaire to be completed by each construction company, engineering firm, consultant, legal firm, product vendor, and any other business entity seeking to contract with the authority to perform a public works project in excess of five million dollars ($5,000,000). The authority shall require its inspector general to review the questionnaire to ensure it solicits, at a minimum, information on all of the following subjects regarding the firm: (1) Experience. (2) Quality and timeliness of past performance. (3) Reliability and responsibility. (4) Compliance with equal employment requirements. (5) Compliance with wage, hours, and other fair labor standards. (6) Subcontractors used by the firm. (7) Integrity of the firm and its key personnel. (8) Gifts given, or contributions made, to members or alternate members or employees of the authority. (b) Neither the authority nor any of its organizational units shall contract or do business with any responding firm that knowingly provides false information in the questionnaire. (c) Nothing in this section is intended to restrict the authority from requiring a similar questionnaire to be completed by any other construction company, engineering firm, consultant, legal firm, product vendor, or any other business entity seeking to contract with the authority. (d) The authority may prequalify prospective contractors for particular types of supplies, services, insurance, or construction, and may limit consideration of bids or proposals to prequalified contractors. SEC. 4. Section 130232 of the Public Utilities Code is amended to read: 130232. (a) Except as provided in subdivision (f), purchase of all supplies, equipment, and materials, and the construction of all facilities and works, when the expenditure required exceeds twenty-five thousand dollars ($25,000), shall be by contract let to the lowest responsible bidder. Notice requesting bids shall be published at least once in a newspaper of general circulation. The publication shall be made at least 10 days before the date for the receipt of the bids. The commission, at its discretion, may reject any and all bids and readvertise. (b) Except as provided for in subdivision (f), whenever the expected expenditure required exceeds one thousand dollars ($1,000), but not twenty-five thousand dollars ($25,000), the commission shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared. (c) Where the expenditure required by the bid price is less than fifty thousand dollars ($50,000), the executive director may act for the commission. (d) All bids for construction work submitted pursuant to this section shall be presented under sealed cover and shall be accompanied by one of the following forms of bidder's security: (1) Cash. (2) A cashier's check made payable to the commission. (3) A certified check made payable to the commission. (4) A bidder's bond executed by an admitted surety insurer, made payable to the commission. (e) Upon an award to the lowest bidder, the security of an unsuccessful bidder shall be returned in a reasonable period of time, but in no event shall that security be held by the commission beyond 60 days from the date that the award was made. (f) The following provisions apply only to the Los Angeles County Metropolitan Transportation Authority: (1) The contract shall be let to the lowest responsible bidder or, in the authority's discretion, to the responsible bidder who submitted a proposal that provides the best value to the commission on the basis of the factors identified in the solicitation when the purchase price of all supplies, equipment, and materials exceeds one hundred thousand dollars ($100,000). "Best value" means the overall combination of quality, price, and other elements of a proposal that, when considered together, provide the greatest overall benefit in response to requirements described in the solicitation documents. The contract shall be let to the lowest responsible bidder when the purchase price of the construction of all facilities exceeds one hundred thousand dollars ($100,000). (2) The authority shall obtain a minimum of three quotations, either written or oral, that permit prices and terms to be compared whenever the expected expenditure required exceeds three thousand dollars ($3,000), but not one hundred thousand dollars ($100,000). (3) The authority may purchase supplies, equipment, and materials from a public auction sale, including public auctions held via the Internet, using the procedures established for all other participants in the public auction. (4) The authority may participate in a procurement agreement involving other public entities that is identified by a procuring public entity or entities as a cooperative procuring agreement from which other public entities may make purchases or enter into contracts, and the authority may procure, and enter into contracts for, items purchased pursuant to that procurement agreement, notwithstanding that the authority may not be the procuring public entity, provided the procurement agreement is awarded or entered into by either of the following: (A) One or more public entities or an organization of public entities, which may include the authority. (B) A federal, state, or local public entity.(5) (A) Notwithstanding any other provision of this article, the(5) A) The authority may award individual contracts, none of which shall exceed eight million dollars ($8,000,000) per year, providing for the issuance of job orders for construction work with compensation for the work based on unit prices. No contract awarded under this paragraph may provide for the issuance of any single job order that would exceed one million dollars ($1,000,000). The maximum amounts set forth in this paragraph shall be adjusted annually to reflect the percentage change in the California Consumer Price Index. The maximum term of a contract issued pursuant to this paragraph shall not exceed one year, plus four option terms of one year each. The contracts shall be awarded to the lowest responsive and responsible bidder. The lowest bid shall be based upon the bidder's percentage adjustment to the unit prices for units of work listed and described either in (i) a book of unit prices for units of work that is an industry standard and is incorporated in the authority's invitation for bid, or (ii) a schedule of unit prices for units of work contained in the authority's invitation for bid. (B) Notwithstanding Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code, subject to the approval of the authority, a contractor may enter into subcontracts with subcontractors that were not listed in the bid for the job order contract, but are listed in the contractor's proposal for a job order under the contract. (C) Nothing in this article or in this code shall prohibit the authority from entering into job order contracts as an alternative to any contracting procedures that the authority is otherwise authorized or required by law to use.(C)(D) For purposes of this paragraph: (i) "Job order" means an order issued by the authority to a contractor to perform construction work under a contract awarded under this paragraph. (ii) "Unit price" means the amount paid for a single unit of an item of work. SEC. 5. Section 130242 of the Public Utilities Code is amended to read: 130242. (a) In addition to the other powers it possesses, andnotwithstanding any other provision of lawas an alternative to any contracting procedures the authority is otherwise authorized or required by law to use , the authority may enter into contracts with private entities, the scope of which may combine within a single contract all or some of the planning, design, permitting, development, joint development, construction, construction management, acquisition, leasing, installation, and warranty of all or components of (1) transit systems, including, without limitation, passenger loading or intermodal station facilities, and (2) facilities on real property owned or to be owned by the authority. (b) The authority may award contracts pursuant to subdivision (a) after a finding, by a two-thirds vote of the members of the authority, that awarding the contract under this section will achieve for the authority, among other things, certain private sector efficiencies in the integration of design, project work, and components. (c) A contract awarded pursuant to this section may include operation and maintenance elements, if the inclusion of those elements (1) is necessary, in the reasonable judgment of the authority, to assess vendor representations and warranties, performance guarantees, or life cycle efficiencies, and (2) does not conflict with collective bargaining agreements to which the authority is a party. (d) Any construction, alteration, demolition, repairs or other works of improvement performed under a contract awarded pursuant to this section shall be considered a public works project subject to Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code, and shall be enforced by the Department of Industrial Relations in the same way it carries out this responsibility under the Labor Code. (e) A contract under this section shall be let to the lowest responsible bidder whose bid is responsive to the criteria set forth in the invitation for bid, or, in the authority's discretion, to a contractor chosen by a competitive bidding process that employs selection criteria in addition to cost.Any design work performed pursuant to this section shall be prepared and signed by an architect certificated pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of the Business and Professions Code.Notice requesting bids shall be published at least once in a newspaper of general circulation. The publication shall be made at least 60 days before the receipt of the bids. The authority, at its discretion, may reject any and all bids, and may readvertise. All bids and price proposals submitted pursuant to this section shall be presented under sealed cover and shall be accompanied by one of the following forms of bidder security: (1) cash, (2) a cashier's check made payable to the authority, (3) a certified check made payable to the authority, or (4) a bidder's bond executed by an admitted surety insurer, made payable to the authority. Upon an award, the security of each unsuccessful bidder shall be returned in a reasonable period of time, but in no event shall that security be held by the authority beyond 60 days from the time the award is made. (f) When the design of portions of the project permits the selection of subcontractors, the contractor shall competitively bid those portions. The contractor shall provide to the authority a list of subcontractors whose work is in excess of one-half of 1 percent of the total project cost as soon as the subcontractors are identified. Once listed, the subcontractors shall have the rights provided in the Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code). SEC. 6. Section 130243 of the Public Utilities Code is repealed.