Bill Text: CA AB1431 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Local Agency Public Construction Act: job order contracting.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2015-10-10 - Chaptered by Secretary of State - Chapter 753, Statutes of 2015. [AB1431 Detail]

Download: California-2015-AB1431-Amended.html

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BILL NUMBER: AB 1431	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 30, 2015
	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member Gomez

                        FEBRUARY 27, 2015

   An act to add and repeal Article 60.4 (commencing with Section
20919.20) of Chapter 1 of Part 3 of Division 2 of the Public Contract
Code, relating to local public contracting.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1431, as amended, Gomez. Local Agency Public Construction Act:
job order contracting.
   Existing law, the Local Agency Public Construction Act, authorizes
job order contracting, as provided, by the Los Angeles Unified
School District (LAUSD), until December  1,  
31,  2020.
   This bill would authorize job order contracting in a similar
manner for school districts other than LAUSD until January 1, 2022.
The bill would restrict job order contracting pursuant to the bill to
school districts that have entered into a project labor agreement or
agreements, as defined, 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. The bill would require job order contractors to
submit a questionnaire to the school district containing specified
information verified under oath. By expanding the crime of perjury,
this bill would 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.  Article 60.4 (commencing with Section 20919.20) is
added to Chapter 1 of Part 3 of Division 2 of the Public Contract
Code, to read:

      Article 60.4.  Job Order Contracting for School Districts


   20919.20.  The Legislature finds and declares all of the
following:
   (a) It is the intent of the Legislature, in enacting this article,
to demonstrate an alternative and optional procedure for bidding of
public works projects that is applicable only to school districts
other than the Los Angeles Unified School District. The Legislature
has previously authorized the use of this alternative and optional
procedure in Article 60.3 (commencing with Section 20219) only for
the Los Angeles Unified School District, which is using the procedure
in conjunction with its project stabilization agreement.
   (b) Districts should be able to utilize cost-effective options for
the delivery of public works projects, in accordance with the
national trend, which include authorizations in California, to allow
public entities to utilize job order contracts as a project delivery
method.
   (c) The benefits of a job order contract project delivery system
include accelerated completion of the projects, cost savings, and
reduction of construction contracting complexity for the unified
school district.
   (d) The job order contracting approach should be used for the
purposes of reducing project cost and expediting project completion.
   (e) The Legislature is uncertain of the benefits and advantages of
job order contracting for California school districts and therefore
looks forward to the reports required by Section 20919.32 in order to
fully and competently assess any further exemptions to the school
contracting process.
   (f) The availability of job order contracting as a project
delivery method will not preclude the use of traditional methods of
project delivery if a traditional method results in higher cost
savings.
   (g) It is the intent of the Legislature that job order contracts
be competitively bid and awarded to the bidder providing the most
qualified responsive bid. It is further the intent of the Legislature
that school districts use the job order contract process pursuant to
this article only if the school district has entered into a project
labor agreement that meets the requirements of Section 2500 for all
its public works projects.
   20919.21.  As used in this chapter:
   (a) "Adjustment factor" means the job order contractor's
competitively bid adjustment to the school district's prices as
published in the catalog of construction tasks.
   (b) "Catalog of construction tasks" means a book containing
specific construction tasks and the unit prices to install or
demolish that construction. The listed tasks shall be based on
generally accepted industry standards and information, where
available, for various items of work to be performed by the job order
contractor. The prices shall include the cost of materials, labor,
and equipment for performing the items of work. The prices shall not
include overhead and profit. All unit prices shall be developed using
local prevailing wages.
   (c) "Indefinite quantity" means one or more of the construction
tasks listed in the catalog of construction tasks.
   (d) "Job order" means a firm, fixed priced, lump-sum order issued
by the school district to a job order contractor for a definite
project scope of work as compiled from the catalog of construction
tasks to be performed pursuant to a job order contract. No single job
order may exceed one million dollars ($1,000,000) in value.
   (e) "Job order contract" means a contract, awarded to the most
qualified bidder as described in paragraph (1) of subdivision (b) of
Section 20919.24, between the school district and a licensed, bonded,
and general liability insured contractor in which the contractor
agrees to a fixed period, fixed unit price, and indefinite quantity
contract that provides for the use of job orders for public works or
maintenance projects.
   (f) "Job order contract technical specifications" means a book,
published by the school district, detailing the technical
specifications with regard to quality of materials and workmanship to
be used by the job order contractor in accomplishing the tasks
listed in the catalog of construction tasks.
   (g) "Job order contractor" means a licensed, bonded, and general
liability insured contractor awarded a job order contract.
   (h) "Offer to perform work" means the job order contractor's
proposal for a specific job order.
   (i) "Plans and specifications" means the catalog of construction
tasks and the job order contract technical specifications. The scope
of work to be performed with a job order contract is potentially, but
not necessarily, all the tasks published in the catalog of
construction tasks.
   (j) "Project" means the specific requirements and work to be
accomplished by the job order contractor in connection with an
individual job order.
   (k) "Project labor agreement" means an agreement that meets the
requirements of Section 2500.
   (l) "Project scope of work" means the document and related
drawings, specifications, and writings referenced therein which
together set forth the specific requirements and work to be
accomplished by the job order contractor in connection with an
individual job order.
   (m) "Proposal" means the job order contractor prepared document
quoting those construction tasks listed in the catalog of
construction tasks that the job order contractor requires to complete
the project scope of work, together with the appropriate quantities
of each task. The pricing of each task shall be accomplished by
multiplying the construction task unit price by the proposed quantity
and the contractor's competitively bid adjustment factor. The
proposal shall also contain a schedule for the completion of a
specific project scope of work as requested by the school district.
The proposal may also contain approved drawings, work schedule,
permits, or other documentation as the school district may require
for a specific job order.
   (n) "Public works" has the same meaning as in Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the Labor
Code.
   (o) "Public works project" has the same meaning as "public
project," as defined in Section 22002.
   (p) "Subcontractor" means any person, firm, or corporation, other
than the employees of the job order contractor, who is bonded and
general liability insured and who contracts to furnish labor, or
labor and materials, at the worksite or in connection with a job
order, whether directly or indirectly on behalf of the job order
contractor.
   (q) "School district" means any school district other than the Los
Angeles Unified School District.
   20919.22.  Nothing in this article or in this code shall prohibit
the school district from utilizing job order contracting, as an
alternative to any contracting procedures that the school district is
otherwise authorized or required by law to use.
   20919.23.  (a) The school district may utilize job order
contracting pursuant to this article only if the school district has
entered into a project labor agreement or agreements that will apply
to all public works in excess of twenty-five thousand dollars
($25,000) undertaken by the school district through at least December
31, 2021, regardless of what contracting procedure is used to award
that work.
   (b) The school district shall prepare an execution plan for all
modernization projects that may be eligible for job order contracting
pursuant to this article. The school district shall select from that
plan a sufficient number of projects to be initiated as job order
contracts during each calendar year and shall determine for each
selected project that job order contracting will reduce the total
cost of that project. Job order contracting shall not be used if the
school district finds that it will increase the total cost of the
project.
   20919.24.  Bidding for job order contracts shall progress as
follows:
   (a) (1) The school district shall prepare a set of documents for
each job order contract. The documents shall include a catalog of
construction tasks and preestablished unit prices, job order contract
technical specifications, and any other information deemed necessary
to describe adequately the school district's needs.
   (2) Any architect, engineer, or consultant retained by the school
district to assist in the development of the job order contract
documents shall not be eligible to participate in the preparation of
a bid with any job order contractor.
   (b) Based on the documents prepared under subdivision (a), the
school district shall prepare a request for bid that invites
prequalified job order contractors to submit competitive sealed bids
in the manner prescribed by the school district.
   (1) (A) The prequalified job order contractors, as determined by
the school district, shall bid one or more adjustment factors to the
unit prices listed in the catalog of construction tasks based on the
job order contract technical specifications. Awards shall be made to
the prequalified bidder that the school district determines to be the
most qualified based upon preestablished criteria made by the school
district. The prequalified bidder must be in compliance with the
school district's project labor agreement.
   (B) Compliance shall constitute no more than three major
violations on any school district projects within the last three
years. If a contractor has more than three violations within a
three-year period of time, the school district shall seek
administrative review of the violations. Violations will include, but
are not limited to, the following:
   (i) Failure to register core workers with the appropriate building
trade union.
   (ii) Failure to assign apprentices in accordance with Section
1777.5 of the Labor Code.
   (iii) Failure to comply with subdivision (c) of Section 20919.25.
   (iv) Incorrect assignment of work in accordance with the school
district's project labor agreement.
   (2) The school district may award multiple job order contracts.
Each job order contract shall be awarded to the most qualified
prequalified bidder described in paragraph (1).
   (3) The request for bids may encourage the participation of local
construction firms and the use of local subcontractors.
   (c) (1) The school district shall establish a procedure to
prequalify job order contractors using a standard questionnaire that
includes, at a minimum, the issues covered by the standardized
questionnaire and model guidelines for rating bidders developed by
the Department of Industrial Relations pursuant to subdivision (a) of
Section 20101. This questionnaire shall require information
including, but not limited to, all of the following:
   (A) If the job order contractor is a partnership, limited
partnership, or other association, a listing of all of the partners
or association members known at the time of bid submission who will
participate in the job order contract.
   (B) Evidence that the members of the job order contractor have the
capacity to complete projects of similar size, scope, or complexity,
and that proposed key personnel have sufficient experience and
training to competently manage the construction of the project, as
well as a financial statement that assures the school district that
the job order contractor has the capacity to complete the project.
   (C) The licenses, registration, and credentials required to
perform construction, including, but not limited to, information on
the revocation or suspension of any license, credential, or
registration.
   (D) Evidence that establishes that the job order contractor has
the capacity to obtain all required payment and performance bonding
and liability insurance.
   (E) Information concerning workers' compensation experience
history, worker safety programs, and apprenticeship programs.
   (i) An acceptable safety record as determined by the school
district. In its determination, the school district shall consider,
but is not required to find, a contractor's safety record as
acceptable if its experience modification rate for the most recent
three-year period is an average of 1.00 or less, and its average
total recordable injury/illness rate and average lost work rate for
the most recent three-year period do not exceed the applicable
statistical standards for its business category or if the contractor
is a party to an alternative dispute resolution system as provided
for in Section 3201.5 of the Labor Code.
   (ii) Skilled labor force availability as determined by the
existence of an agreement with a registered apprenticeship program,
approved by the California Apprenticeship Council, that has graduated
apprentices in each of the preceding five years. This graduation
training for any craft that was first deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft within the five years prior to the effective
date of this article.
   (F) A full disclosure regarding all of the following that are
applicable:
   (i) Any serious or willful violation of Part 1 (commencing with
Section 6300) of Division 5 of the Labor Code or the federal
Occupational Safety and Health Act of 1970 (Public Law 91-596),
settled against any member of the job order contractor.
   (ii) Any debarment, disqualification, or removal from a federal,
state, or local government public works project.
   (iii) Any instance where the job order contractor, or its owners,
officers, or managing employees submitted a bid on a public works
project and were found to be nonresponsive, or were found by an
awarding body not to be a responsible bidder.
   (iv) Any instance where the job order contractor, or its owners,
officers, or managing employees defaulted on a construction contract.

   (v) Any violations of the Contractors' State License Law (Chapter
9 (commencing with Section 7000) of Division 3 of the Business and
Professions Code), excluding alleged violations of federal or state
law regarding the payment of wages, benefits, apprenticeship
requirements, or personal income tax withholding, or of Federal
Insurance Contribution Act (FICA) withholding requirements settled
against any member of the job order contractor.
   (vi) Any bankruptcy or receivership of any member of the job order
contractor, including, but not limited to, information concerning
any work completed by a surety.
   (vii) Any settled adverse claims, disputes, or lawsuits between
the owner of a public works project and any member of the job order
contractor during the five years preceding submission of a bid under
this article, in which the claim, settlement, or judgment exceeds
fifty thousand dollars ($50,000). Information shall also be provided
concerning any work completed by a surety during this period.
   (G) In the case of a partnership or any association that is not a
legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the job order
contract.
   (2) The information required under this subdivision shall be
verified under oath by the entity and its members in the manner in
which civil pleadings in civil actions are verified. Information that
is not a public record under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code) shall not be open to public inspection.
   20919.25.  (a) The maximum total dollar amount that may be awarded
under a single job order contract shall not exceed five million
dollars ($5,000,000) in the first term of the job order contract and,
if extended or renewed, ten million dollars ($10,000,000) over the
maximum two terms of the job order contract adjusted annually to
reflect the percentage change in the California Consumer Price Index.

   (b) Job order contracts may be executed for an initial contract
term of no more than 12 months, with the option of extending or
renewing the job order contract for two 12-month periods. The term of
the job order contract shall be for the contract term or whenever
the maximum value of the contract is achieved, whichever is less. All
extensions or renewals shall be priced as provided in the request
for bids. The extension or renewal shall be mutually agreed to by the
school district and the job order contractor.
   (c) The school district may issue job orders to the job order
contractor that has been awarded the job order contract. The job
order issued to the job order contractor shall not commence for seven
days from the time the job order was issued and the job order
contractor shall provide a minimum of seven days notice for the
addition of any subcontractor or substitution of any subcontractor as
described in subdivision (e) of Section 20919.26. The job order
shall be based on a project scope of work prepared by the school
district as well as a proposal from the job order contractor who is
awarded the job order contract. No single job order may exceed one
million dollars ($1,000,000).
   (d) It is unlawful to split or separate into smaller job orders
any project for the purpose of evading the cost limitation provisions
of this chapter.
   (e) All work performed under the job order contract shall be
covered by a project  stabilization  labor 
agreement.
   (f) Any change or alteration to a job order shall be in compliance
with Section 20118.4.
   20919.26.  (a) All work bid under the job order shall comply with
Chapter 4 (commencing with Section 4100) of Part 1 and is subject to
all of the penalties and provisions set forth in that chapter.
   (b) For purposes of this article, if the primary job order
contractor chooses to use subcontractors, the primary job order
contractor is required to verify that the subcontractors possess the
appropriate licenses and credentials required to perform
construction.
   (c) Notwithstanding subdivision (a), the primary job order
contractor may use subcontractors that are not listed at the time the
job order is issued if the work to be performed under that job order
is less than ten thousand dollars ($10,000).
   (d) If the primary job order contractor chooses to use a
subcontractor that is not listed at the time of bid to perform work
on a job order, both of the following apply:
   (1) The primary job order contractor shall provide public notice
of the availability of work to be subcontracted by trade. The public
notice shall include the scope of work; the project location; the
name, address, and the telephone number of the primary job order
contractor; and the closing date, time, and location for sealed bids
to be submitted.
   (2) The primary job order contractor shall take sealed bids from
the subcontractors solicited for the proposal. These bids shall be
publicly opened at a prescribed time and place by the primary job
order contractor. After the bids are opened, the job order contractor
shall notify the school district which subcontractor was selected.
   (3) The notification shall include every subcontractor for all
tiers and must establish the authorized subcontractor list for the
job order. Work shall not commence prior to seven days notice of the
established subcontractor list and the subsequent addition of any
subcontractor to the job order.
   (4) The notification shall identify the scope of the work to be
performed by each subcontractor to the job order, broken down by
craft. If a subcontractor performs multiple crafts, the job order
contractor shall identify the work of each craft to be performed.
   (e) If the primary job order contractor chooses to make a
substitution to the subcontractor list, the primary job order
contractor shall provide a minimum of seven days' notice to the
school district along with justification as to the need for the
substitution. The school district may request a hearing to evaluate
the substitution request, which shall be in accordance with Chapter 4
(commencing with Section 4100) of Part 1.
   (f) If the school district determines that there has been a
violation of Chapter 4 (commencing with Section 4100) of Part 1,
including bid shopping by the primary job order contractor, the
school district may terminate the job order or the contractor may
lose authorization to proceed with awarded work subject to the school
district's administrative due process review, if such review is
established pursuant to the school district's project labor
agreement. If the school district determines that a job order
contractor has violated any provision set forth in Chapter 4
(commencing with Section 4100) of Part 1, the school district may
declare the contractor ineligible for future job orders and may
result in a loss of prequalification status for a period of time to
be determined by the school district.
   20919.27.  (a) A job order contract shall set forth in the general
conditions of the job order contract the party or parties
responsible for seeing that the provisions of Article 2 (commencing
with Section 1770) of Chapter 1 of Part 7 of Division 2 of the Labor
Code are complied with.
   (b) For purposes of job order contracting, prevailing wages when
required to be paid shall apply to all work ordered under the job
order contract regardless of thresholds set forth in Section 1771.5
of the Labor Code.
   (c) The job order contractor shall pay the prevailing wage in
effect at the time the job order is issued by the school district and
all increases as published by the Department of Industrial Relations
for the term of the job order contract, including all overtime,
holiday, and shift provisions published by the Department of
Industrial Relations.
   (d) The school district shall designate one individual 
within its labor compliance office  to act as a monitor to
inspect job sites for labor compliance violations at the request of
the designated labor representative in its project labor agreement.
   20919.28.  A willful violation of Section 20919.26 occurs when the
job order contractor or subcontractor knew or reasonably should have
known of his or her obligations under the public works law and
deliberately fails or refuses to comply with its provisions. The
school district using job order contracting shall publish and
distribute to the Labor Commissioner a list of all job order
contractors or subcontractors who violate this provision and the
school district shall not award a job order contract or any future
job orders under an existing job order contract to any contractor or
subcontractor who violates this provision during the effective period
of debarment of the contractor or subcontractor.
   20919.29.  For purposes of employment of apprentices on job order
contracts, when the individual job order involves more than thirty
thousand dollars ($30,000) or 20 working days, all general
contractors or subcontractors shall at all times be in compliance
with Section 1777.5 of the Labor Code and shall comply with the
following:
   (a) Prior to commencing work on an individual job order, every
contractor shall submit job order award information to an applicable
apprenticeship program that can supply apprentices to the site of the
job order. The information submitted shall include an estimate of
the journeyman hours to be performed under the contract, the number
of apprenticeships proposed to be employed, and the approximate dates
the apprentices would be employed. A copy of this information shall
also be submitted to the awarding agency if requested by the awarding
agency.
   (b) The ratio of work performed by apprentices to journeymen
employed in a particular craft or trade on the job order may be no
higher than the ratio stipulated in the apprenticeship standard under
which the apprenticeship program operates where the job order
contractor agrees to be bound by those standards but, except as
otherwise provided in Section 1777.5 of the Labor Code, in no case
shall the ratio be less than one hour of apprenticeship work for
every five hours of journeyman work.
   (c) Every apprentice employed under the job order contract shall
be paid the prevailing rate of per diem wages for apprentices in the
trade to which he or she is registered and shall be employed only at
the work of the craft or trade to which he or she is registered.
   (d) Every apprentice employed under the job order contract shall
be hired from the local joint labor management apprenticeship
committee that has jurisdiction in the geographic area of the
project.
   20919.30.  A job order contractor or subcontractor that knowingly
violates the provisions involving employment of apprentices shall
forfeit as a civil penalty an amount not exceeding one hundred
dollars ($100) for each full calendar day of noncompliance. The
amount of this penalty shall be based on consideration of whether the
violation was a good faith mistake due to inadvertence. A contractor
or subcontractor that knowingly commits a second or subsequent
violation of the provisions involving employment of apprentices
within a three-year period where the noncompliance results in
apprenticeship training not being provided as required, shall forfeit
as a civil penalty a sum of not more than three hundred dollars
($300) for each full calendar day of noncompliance and shall not be
awarded any further job orders under the job order contract and shall
be precluded for a period of one year from bidding on any future job
order contracts.
   20919.31.  In order to prevent fraud, waste, and abuse, the school
district adopting job order contracting shall do all of the
following:
   (a) Prepare for each individual job order developed under a job
order contract an independent school district estimate. The estimate
will be prepared prior to the receipt of the contractor's offer to
perform work and will be compared to the contractor's proposed price
to determine the reasonableness of that price before issuance of any
job order. The basis for any adjustments to the school district
estimate is to be documented. In the event that the contractor's
proposal for a given job order is found to be unreasonable, not cost
effective, or undesirable, the school district is under no obligation
to issue the job order to the job order contractor, and may instead
utilize any other available procurement procedures.
   (b) The school district shall not issue a job order until the job
order has been reviewed and approved by at least two levels of
management.
   (c) Once a job order has been issued, all documents pertaining to
preparation and approval of the job order, including the independent
school district estimate, shall be available for public review.

20919.32.  If the school district adopts the job order contracting
process, the school district shall submit to the Office of Public
School Construction in the Department of General Services, the Senate
Committee on Business, Professions and Economic Development and
Assembly Committee on Business, Professions and Consumer Protection,
the Senate and Assembly Committees on Education, and the Joint
Legislative Budget Committee before December 31, 2019, a report
containing a description of each job order contract procured, and the
work under each contract completed on or before June 30, 2019. The
report shall be prepared by an independent third party and the school
district shall pay for the cost of the report. The report shall
include, but not be limited to, all of the following information:
   (a) A listing of all projects completed under each job order
contract.
   (b) The job order contractor that was awarded each contract.
   (c) The estimated and actual project costs.
   (d) The estimated procurement time savings.
   (e) A description of any written protests concerning any aspect of
the solicitation, bid, proposal, or award of the job order contract,
including, but not limited to, the resolution of the protests.
   (f) An assessment of the prequalification process and criteria.
   (g) A description of the labor force compliance program required
under Section 20919.24, and an assessment of the impact on a project
where compliance with that program is required.
   (h) Recommendations regarding the most appropriate uses for the
job order contract process.
   20919.33.  If, after 30 days from receipt of the invoice, a
contract has not been paid, the contractor shall contact the
designated school district employee to resolve payment. If the
contact with the school district's designee does not provide full
payment within three business days, the contractor may request a
special convening of the payment resolution committee.
   (a) The payment resolution committee shall be composed of a
representative of the contractor, a representative from labor, a
representative designated by the director of facilities within the
school district, and a representative designated by the director of
facilities support services within the school district.
   (b) After convening, the committee shall make its recommendation
of payment within three business days. 
   20919.34.  It is the intent of the Legislature that a moratorium
be placed on the enactment of any additional legislation authorizing
school districts to use job order contracting until the Legislature
has received the reports required by Sections 20919.12 and 20919.32.

    20919.35.   20919.34.   This article
shall remain in effect only until January 1, 2022, and as of that
date is repealed, unless a later enacted statute, that is enacted
before January 1, 2022, deletes or extends that date.
  SEC. 2.  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.