CAPPO Legislative Update
Tuesday, May 18, 2021
One of a procurement professional’s challenges is staying on top of the myriad of state and federal laws and regulations applicable to our field. This summary of legislative and regulatory impacts will be a periodic feature of CAPPO news. Legislative Update The state’s legislative session started, and there are several bills impacting procurement are working through the legislature. At the time of this writing, there are 23 bills with a meaningful impact to public procurement. It is not known until later in the summer which bills are likely to reach the governor’s desk for signature. CAPPO will provide an update in October on which bills are signed into law. | Measure | Subject | Agency Type Affected | Implication | | AB-13 | Public contracts: automated decision systems. | State and local agencies | Establishes a “value-effective” method of procurement for ADS systems. State agencies are required to use value-effective method, and local agencies may use value-effective method. | | AB-36 | Design-build contracting: Town of Paradise | Single local agency | Authorizes the Town of Paradise and the Paradise Irrigation District to use design-build procurement for specific projects. | | AB-271 | Santa Clara Valley Water District: contracts: best value procurement. | Single local agency | Authorizes the District to use best value procurement for a specific project. | | AB-349 | Small businesses: contracting: outreach: underrepresented groups. | State agencies | Requires more outreach to underrepresented groups to inform them of contracting opportunities. | | AB-394 | Fresno Metropolitan Flood Control District: contracts. | Single local agency | Raises the threshold amount requiring public bidding for materials or supplies to $25,000. | | AB-416 | California Deforestation-Free Procurement Act: public works projects: wood and wood products. | State agencies | Contractors must certify wood products did not come from an intact tropical or boreal forest. | | AB-577 | County drainage districts: levee districts: reclamation districts. | Special districts | Raises the threshold of when lowest bidder is used to $50,000 for materials or improvements. | | AB-661 | Recycling: materials. | State agencies | Purchase of recycled materials required over non-recycled material without regard to cost. | | AB-683 | Recycling: procurement. | State agencies | Allows Cal Recycle to add additional products to mandatory recycled product purchases. | | AB-712 | Local Agency Public Construction Act: change orders: County of Los Angeles | Single county | Increases the limits of the value of change orders that can be signed by staff, contains sunset clause | | AB-782 | Congo Child Labor Act of 2021. | All | Prohibits sale of cobalt in California unless seller certifies the cobalt is sourced without using child labor. A list of compliant sellers to be maintained by Franchise Tax Board. | | AB-846 | Local Agency Public Construction Act: job order contracting. | School districts | Extends sunset provision allowing JOCs, and adds a “skilled & trained workforce” requirement. | | AB-915 | Small and disadvantaged business enterprises. | State agencies | Requires a 5% preference towards disadvantaged businesses as part of lowest-bidder public works solicitations. | | AB-983 | Public contracts: construction projects: community workforce agreements: battery manufacturing and lithium-based technology. | All | Allows the use of community workforce agreements in battery projects. | | AB-1365 | Public contracts: clean concrete. | State agencies | Requires the use of performance-based specifications for concrete in construction to minimize climate change impacts. | | AB-1369 | Buy Clean California Act: eligible materials: product-specific global warming potential emissions. | State agencies | Requires the establishment of maximum climate change potential impact for additional products used in construction. | | AB-1397 | Public contracts: California Lithium Economy Act. | State agencies | Requires state contractors to perform supply chain disclosures and procure a minimum amount of lithium within California. | | AB-1499 | Transportation: design-build: highways. | Single state agency | Removes sunset provisions on design-build authorization. | | AB-1560 | Distance learning: pupil access: computing devices and broadband internet service. | Single state agency and school districts | State Department of Technology is authorized to enter into a broadband service agreement on behalf of school districts. | | SB-333 | San Joaquin Regional Transit District: procurement. | Single local agency | Raises formal competitive bidding threshold to $150,000, requires informal bidding between $5,000 and $150,000. | | SB-379 | University of California: contracts: health facilities. | Single state agency | UC system cannot enter into a health facility contract that would restrict the ability of UC health care staff from providing medical information/services. | | SB-569 | Public contracts: judicial branch entities. | State agencies | Lowers the requirement when judicial agencies must notify the State Auditor and the legislature when a contract exceeds $1,000,000 | | SB-626 | Department of Water Resources: Procurement Methods. | Single state agency | Authorizes the use of Construction Manager/General Contractor for certain projects and expands authorization to use design-build projects. | | SB-674 | Public Contracts: workforce development: transportation-related contracts. | State agencies, cities, and counties | Certain transportation-related contracts of $5,000,000 or more need to prioritize the hiring of displaced workers and other people facing employment barriers. | State Regulatory Issues CUPCCAA force-account clarifications The oversight body for the California Uniform Public Construction Cost Accounting Act, recently provided additional clarification around the use of force-account. Agencies that participate in CUPCCAA and utilize force account for small projects should review the most recent question and answer document. It can be found at the March 12, 2021 meeting, Item 10A at https://www.sco.ca.gov/ard_cuccac.html Department of Industrial Relations public works determinations The DIR periodically issues public works determinations that impact our profession’s understanding of what is a public works project. Most recently, the DIR found that an energy-efficiency loan to support a public agency energy efficiency project is still considered “public funds” if the loan funds goes into the agency’s possession. Thus, such projects are subject to public works laws. Procurement professionals involved with public works may find the ruling informative. The full discussion and specific circumstances that trigger this interpretation is here: https://www.dir.ca.gov/oprl/pwdecision.asp CalRecycle Organic Waste Procurement requirements Following up on an earlier CAPPO email, CalRecycle is implementing an organic waste procurement requirement for cities and counties. This is a complicated requirement, and procurement professionals should review the materials at the CalRecycle page, utilize the CalRecycle procurement calculator tool, and plan for the procurement of organic waste products beginning in January 2022. Resources are available at: https://www.calrecycle.ca.gov/organics/slcp/procurement Hospital facilities supplier diversity requirement Beginning July 2021, hospitals with operating expenses of $50M (or $25M if the hospital is part of a hospital system) needs to submit an annual report to the State on the previous year’s supplier diversity efforts. This requirement was adopted with the passage of Assembly Bill 962 of 2019. Procurement professionals serving a public hospital are recommended to review the Office of Statewide Health Planning and Development information to make sure they are prepared to file the report. More information is available at: https://oshpd.ca.gov/data-and-reports/cost-transparency/hospital-supplier-diversity-4/ Court Issues California Supreme Court ruling impacting special districts The California Supreme Court issued a March 2021 ruling expanding the definition of public works for certain types of special districts. In Kaanaana v. Barrett Business Services Inc., the Court ruled that the “public works” definition for certain special districts is not limited to construction-type work. Special district procurement professionals should review this decision with their legal counsel to determine how this impacts existing contracts and future solicitations. The full opinion is at https://www.courts.ca.gov/opinions/documents/S253458.PDF Federal Regulatory Issues For those of us who must be aware of federal funding rules, the Office of Management and Budget updated certain sections of 2 CFR 200 in November 2020 that impact procurement. FEMA best summarized the changes to procurement, as: In addition to implementing a new statutory prohibition regarding covered telecommunications equipment and services, OMB also revised the Federal procurement under grants standards to provide greater flexibility regarding the micro-purchase threshold, incorporate the increased micro-purchase and simplified acquisition thresholds, add a domestic preferences provision, and require states to follow the socioeconomic contracting steps. There are more changes that impact those who involved in contracting and grants. The detailed summary is here: https://www.fema.gov/fact-sheet/2-cfr-updates
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