Bills We’re Watching by Richard Markuson, CAPHCC Lobbyist

Kelly Ceballos Legislative Leave a Comment

Legislation

Perhaps the worst bill (it’s early) introduced this year is AB 618 (Low – D Campbell). It is patterned after AB 1431 from 2015 that authorized K-12 school districts to utilize job order contracting (JOC) for school repairs. AB 618 will apply to Community Colleges.

Under current law, K-12 school districts are required to competitively bid any public works contract over $15,000 and award the contract to the lowest responsible bidder. The traditional method for awarding public works contracts is through the “design-bid-build” method or design/build where school districts issue a bid for both the design and construction of projects over $10 million; best value, which authorizes school districts to consider factors other than cost; and JOC.

JOC is an alternative method for awarding contracts that is not based on bids for a specific project, but rather based on prices for specific construction tasks. A catalog or book identifies all work that could be performed – typically maintenance or modernization projects – and the unit prices for each of those tasks. The tasks are based on accepted industry standards and prices include the cost of materials, labor, and equipment for performing the work, but exclude overhead and profit. A contractor, who has been prequalified, submits bids using an adjustment factor. The unit price, multiplied by the adjustment factor equals the price the contractor is willing to accept for work for those tasks. Selection of the contractors is based on the lowest responsible bidder; however, a school district may select more than one contractor. When the school district has a project that requires the tasks for which a contractor has been awarded, the school district will provide a job order with the details of the job. The authorization for LAUSD and this bill limit the amount for each job order to $1 million and the total amount of the initial contract for a contractor to $5 million and renewed for two more 12-month terms for $10 million. JOC allows a school district to identify contractors for specific tasks and locks in the price for up to $5 million worth of work. JOC is intended to reduce costs and accelerate completion of smaller projects; it is not generally viewed as an appropriate method of contracting for large, complex construction projects that require extensive or innovative design or are likely to encounter changes and revisions during constructions.

Sounds like a not too bad idea but the authority was sponsored by the State Building and Construction Trades Council so you’ll never guess what the included.

The bill requires school district to utilize JOC only if the school district has entered into a project labor agreement or agreements that will apply to all public works in excess of $25,000 undertaken by the school district through at least December 31, 2021, regardless of what contracting procedure is used to award that work.

PHCC is opposing and asking the League of Community Colleges to weigh in. Feel free to share your thoughts about the idea with Assemblyman Low at assemblymemberlow@assembly.ca.gov or tweet out a comment to him at @asmevanlow use #AB618badideaforschools. Be polite but point out the inconsistency of enacting an alternative delivery technique but hammering districts that want to experiment with it. Even Governor Browns Department of Finance were skeptical noting: the higher construction costs associated with the PLA mandate could offset any JOC derived savings for school districts. But Brown signed.

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