California 2011 2011-2012 Regular Session

California Assembly Bill AB2508 Amended / Bill

Filed 05/25/2012

 BILL NUMBER: AB 2508AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 25, 2012 AMENDED IN ASSEMBLY MAY 2, 2012 AMENDED IN ASSEMBLY APRIL 19, 2012 AMENDED IN ASSEMBLY MARCH 29, 2012 INTRODUCED BY Assembly Member Bonilla (Coauthor: Assembly Member Beall) FEBRUARY 24, 2012 An act  to amend Section 10111 of, and  to add Chapter 3.7 (commencing with Section 12140) to Part 2 of Division 2  of,   of  the Public Contract Code, relating to public contracts. LEGISLATIVE COUNSEL'S DIGEST AB 2508, as amended, Bonilla. Public contracts: public health agencies. Existing law requires a state agency to comply with specified procedures in awarding agency contracts. This bill would  , with specified exceptions,  also prohibit a state agency authorized to contract for public benefit programs from contracting for call center services with a contractor or subcontractor unless that contractor or subcontractor certifies under penalty of perjury in his or her bid for the contract that the contract, and any subcontract performed under that contract, will be performed solely with workers employed in California. This bill would  authorize these agencies to waive this requirement, with the consent of the Controller, if certain conditions are met, and would require the Department of General Services to include specified information relating to these waivers in an annual report, as provided   specify that the Governor may waive these requirements during a declared emergency  . This bill would also require the contract to include a clause for termination for noncompliance and specified penalties, if the contractor or subcontractor performs the contract or the subcontract with workers outside of California during the life of the contract.  This bill would also specify that these provisions do not apply to an existing contract, as provided, or to a contract if the refusal to award that contract would violate the specific terms of federal trade treaties or bilateral or regional free trade agreements, as specified.  By requiring contractors and subcontractors to make certifications under penalty of perjury, this bill would create a new crime and thereby 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 no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares the following: (a) The federal and state economies are recovering from the great recession and California still has a high unemployment rate. Millions of Californians are not working or  are  working less than they want and need full-time employment. California continues to allow state public benefit call center contracts to be awarded to contractors that perform the work outside the United States. (b) By contracting and subcontracting outside of the country, jobs are displaced in the United States and in California, and taxpayer dollars are used to create jobs in foreign countries. State tax revenues should be used to create jobs in the United States and in California, especially when the taxpayer dollars are designated for programs meant to create jobs and address problems associated with joblessness.  SEC. 2.   Section 10111 of the Public Contract Code is amended to read: 10111. Commencing January 1, 2007, the department shall make available a report on contracting activity containing the following information: (a) A listing of consulting services contracts that the state has entered into during the previous fiscal year. The listing shall include the following: (1) The name and identification number of each contractor. (2) The type of bidding entered into, the number of bidders, whether the low bidder was accepted, and if the low bidder was not accepted, an explanation of why another contractor was selected. (3) The amount of the contract price. (4) Whether the contract was a noncompetitive bid contract, and why the contract was a noncompetitive bid contract. (5) Justification for entering into each consulting services contract. (6) The purpose of the contract and the potential beneficiaries. (7) The date when the initial contract was signed, and the date when the work began and was completed. (b) The report shall also include a separate listing of consultant contracts completed during that fiscal year, with the same information specified in subdivision (a). (c) The information specified in subdivisions (a) and (b) shall also include a list of any contracts underway during that fiscal year on which any change was made regarding the following: (1) The completion date of the contract. (2) The amount of money to be received by the contractor, if it exceeds 3 percent of the original contract price. (3) The purpose of the contract or duties of the contractor. A brief explanation shall be given if the change in purpose is significant. (d) The level of participation, by agency, of disabled veteran business enterprises in statewide contracting and shall include dollar values of contract award for the following categories: (1) Construction. (2) Architectural, engineering, and other professional services. (3) Procurement of materials, supplies, and equipment. (4) Information technology procurements. Additionally, the report shall include a statistical summary detailing each awarding department's goal achievement and a statewide total of those goals. (e) The level of participation by small business in state contracting including: (1) Upon request, an up-to-date list of eligible small business bidders by general procurement and construction contract categories, noting company names and addresses and also noting which small businesses also qualify as microbusinesses. (2) By general procurement and construction contract categories, statistics comparing the small business and microbusiness contract participation dollars to the total state contract participation dollars. (3) By awarding department and general procurement and construction categories, statistics comparing the small business and microbusiness contract participation dollars to the total state contract participation dollars. (4) Any recommendations for changes in statues or state policies to improve opportunities for small businesses and microbusinesses. (5) A statistical summary of small businesses and microbusinesses certified for state contracting by the number of employees at the business for each of the following categories: 0-5, 26-50, 51-75, and 76-100. (6) To the extent feasible, beginning in the year 2008, the number of contracts awarded by the department in the categories specified in paragraph (5). (7) The number of contracts and dollar amounts awarded annually pursuant to Section 14838.5 of the Government Code to small businesses, microbusinesses, and disabled veteran business enterprises. (f) The level of participation of business enterprises, by race, ethnicity, and gender of owner, in contracts as identified in Section 2051 of the Government Code, to the extent that the information has been voluntarily reported to the department. In addition, the report shall contain the levels of participation of business enterprises, by race, ethnicity, and gender of owner, for the following categories of contracts, to the extent that the information has been voluntarily reported to the department: (1) Construction. (2) Purchases of materials, supplies, or equipment. (3) Professional services. (g) In the years 2011 and 2012, any errors reported to the department by an awarding agency as required by Sections 10302, 10344, and 12104.5, in the previous fiscal year. (h) Beginning in the year 2013, a list of in-state worker waivers requested by state agencies pursuant to subdivision (d) of Section 12140, including an indication as to whether the Controller rejected the waiver request.   SEC. 3.   SEC. 2.  Chapter 3.7 (commencing with Section 12140) is added to Part 2 of Division 2 of the Public Contract Code, to read: CHAPTER 3.7. PROHIBITION OF THE OFFSHORING OF STATE PUBLIC BENEFITS CONTRACTS 12140. (a) Notwithstanding any other law, any state agency authorized to enter into contracts for public  benefits   benefit  programs shall not contract for call center services for those public benefit programs with a contractor unless that contractor certifies under penalty of perjury in his or her bid for the contract that the contract, or any part thereof, and any subcontract performed under that contract, will be performed solely with workers employed in California. (b) For purposes of this section: (1) "Call center" means a building, facility, or operation where customer or client services or assistance is provided by telephone, fax, email, text, or Web-based interaction. (2) "Public benefit programs" means California Work Opportunity and Responsibility to Kids (CalWORKs), CalFresh, Medi-Cal, Healthy Families, and the California Healthcare Eligibility, Enrollment, and Retention System. (c) The contract shall provide that in the event a contractor or subcontractor performs the contract or the subcontract for call center services with workers outside of California during the life of the contract, the contract shall be terminated for noncompliance and the contractor or subcontractor shall pay a penalty to the state agency in an amount equal to the amount paid by the state agency for the percentage of work that was performed with workers outside of California.  (d) (1) In the case of an emergency, a state agency may waive the requirements of subdivision (a) for a particular contract prior to the notice inviting bids if that state agency submits a written finding relative to the nature of the emergency and facts related to the contract meeting the requirements of subparagraphs (A), (B), and (C) to the Controller, and the Controller does not reject that finding within 30 days of receipt. The term of the waiver shall be for no longer than six months. The finding shall detail how the contract is necessary to respond to an emergency, as determined by the state agency, and that all of the following are true:   (A) The ability of the state agency to provide essential services would be adversely affected if the contract is not performed.   (B) The public health, safety, and welfare would be endangered if the contract is not performed.   (C) A contractor or subcontractor that has the ability to perform the contract solely with workers within California is not immediately available to perform the contract.   (2) In the case of an emergency, a state agency may waive the requirements of subdivision (a) for a particular contract already in force, for a period not to exceed one year per waiver, if that state agency submits a written finding relative to the nature of the emergency and facts related to the contract meeting the requirements of subparagraphs (A), (B), and (C) to the Controller, and the Controller does not reject that finding within 30 days of receipt. The finding shall detail how the contract is necessary to respond to an emergency and that all of the following are true:   (A) The ability of the state agency to provide essential services would be adversely affected if the contract is not performed.   (B) The public health, safety, and welfare would be endangered if the contract is not performed.   (C) A contractor or subcontractor that has the ability to perform the contract solely with workers within California is not immediately available to perform the contract.   (3) If a state agency seeks a waiver pursuant to paragraph (1) or (2), the waiver shall include the facts the agency used to make the findings in paragraph (1) or (2), including, but not limited to, the estimated number of jobs affected and the estimated duration of employment, and salaries of the noncompliant workers. Every contract subject to the provisions of this section shall include information on the conditions and the procedural requirements for making a waiver request to the contracting state agency. The contract shall also include the penalties conferred upon the contractor pursuant to subdivision (c) and paragraph (5) for using out-of-state workers to perform the state contract.   (4) (A) A state agency that seeks a waiver under paragraph (1) or (2) shall, at the same time that the entity provides the written finding to the Controller, post a copy of the written finding on the agency's Internet Web site and provide written notice to the Assembly Committee on Business, Professions, and Consumer Protection, the Assembly Committee on Jobs, Economic Development, and the Economy, the Assembly Committee on Budget, the Senate Committee on Governmental Organization, and the Senate Committee on Budget and Fiscal Review.   (B) The Controller shall annually provide the Department of General Services with a list of waivers requested by state agencies pursuant to paragraph (1) or (2) with an indication of whether the Controller rejected the waiver. The Department of General Services shall include this information in the annual report required in Section 10111 of the Public Contract Code.   (5) If the Controller rejects a written finding while the contract is being performed or after the contract has been performed, the contractor or subcontractor shall pay a penalty to the state agency in an amount equal to the amount paid by the state agency for the percentage of work that was performed with workers outside of California.   (d) The requirements of subdivision (a) shall not apply if the Governor waives those requirements pursuant to Section 8571 of the Government Code.  (e) This section shall not apply to  a   the following:   (1)     A  contract if the refusal to award that contract, on the basis that the contractor or subcontractor does not certify under penalty of perjury that the contract and any subcontract performed under that contract will be performed solely with workers within California, would violate the specific terms of the Agreement on Government Procurement of the World Trade Organization or any other bilateral or regional free trade agreement  that   to which the State of  California has consented  to  .  (f) This section shall not apply to a   (2)     A  contract or subcontract, currently in place, if it would result in a violation of the terms of the contract, but upon expiration of that contract, these provisions shall be added before a new contract can be executed or renewed.  (3) A contract for a public benefit program between a state agency and a health care service plan or a specialized health care service plan regulated by the Department of Managed Health Care, and any subcontract performed under that contract, or a disability insurer or specialized health insurer regulated by the Department of Insurance, and any subcontract performed under that contract.   SEC. 4.   SEC. 3.  No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.