CUPCCAA & SB854

Report
Welcome to the NIGP/ CAPPO
Ninth Annual Cooperative Conference
CUPCCAA and SB854
Presenters:
John Finney, Contract Services Manager
Tracy Soth, Senior Contract Services Officer
California Uniform Public
Construction Cost Accounting Act
(CUPCCAA)
Public Contract Code, Sections 22000 – 22050
These sections are known as the “Uniform
Public Construction Cost Accounting Act”
California Uniform Public
Construction Cost Accounting Act
(CUPCCAA)
It allows local agencies to informally perform public works
projects of up to $175,000, if the agencies elect to follow the
cost accounting procedures set forth in the Cost Accounting
Policies and Procedures Manual of the California Uniform
Construction Cost Accounting Commission.
California Uniform Public
Construction Cost Accounting Act
(CUPCCAA)
• Public projects of $45,000 or less may be performed by the
employees of a public agency by force account, by negotiated
contract, or by purchase order.
• Public projects between $45,000 and $175,000 may be let to
contract by informal procedures as set forth in the Act.
• Public projects of more than $175,000 shall, except as
otherwise provided in the Act, be let to contract by formal
bidding procedure.
“Public Works” Defined
• Why “public works”? Provides local public agencies an alternative to
burdensome and time-consuming formal competitive bidding process on
public projects
• Public Contract Code – erection, construction, alteration, repair, or
improvement of any public structure, building, road, or other public
improvement of any kind
• Labor Code – more extensive, includes above, plus demolition,
installation, laying of carpet, and assembly and disassembly of modular
office systems… paid for in whole or in part out of public funds; includes
maintenance
• Bidding/Contracting Mechanism – Use Public Contract Code
• Prevailing Wages – Use Labor Code
What is NOT a “Public Work”
–Routine, recurring and usual work for the preservation or
protection of any publicly owned or publicly operated
facility
–Minor repainting
–Resurfacing of streets & highways at less than 1”
–Landscape maintenance
Adopting CUPCCAA
• The governing board must elect by resolution to
become subject to the California Uniform Public
Construction Cost Accounting Act.
• The agency must notify the State Controller in
writing of its election to become subject to the
uniform cost accounting procedures and forward a
copy of the resolution.
Adopting CUPCCAA
• The agency must adopt a policy outlining informal
bidding procedures.
• Once an agency has opted in, it must conform to the
uniform cost accounting procedures until the district
opts out of the Act by adopting a resolution opting
out and forwarding said resolution to the State
Controller.
Force Account / Work Done by Purchase
Order/Contract
• When estimating for a project up to $45,000; keep in mind that all
standard public contract and labor code requirements must be met
including but not limited to the requirement to call for prevailing wages,
payment bond for projects in excess of $25,000, fingerprinting,
certifications, etc.
• Change orders are only permitted to a maximum contract total of $45,000.
– Note: Any non-emergency work done by force account in excess of
$45,000 is a violation of the Act.
• Best practices would include ensuring that you are getting the required
scope of work for the best price; therefore, obtaining multiple quotes is
desirable.
• When internal forces are also bidding on the work; the project cost must
include labor, materials, supplies, equipment, and overhead.
Informal Bidding
Projects between $45,000 and $175,000. Project must be let by competitive
bid utilizing informal, streamlined procedures utilizing one of two options:
– Advertisement by bidders list: All contractors on the list for the
category of work being bid as specified in Section 22034
– Advertisement through trade journals and exchanges: All construction
trade journals specified in Section 22036
Informal Bidding – Bidder’s List
– Advertisement by bidders list: All contractors on the list for the
category of work being bid as specified in Section 22034 (a).
– There is NO exemption to maintaining a list of bidders. To be in
compliance with the Act, an Agency must follow PCC 22034 which
outlines the requirements for the qualified Bidder’s List
– If an Agency chooses the list, they must maintain the list in accordance
with the Manual which includes updating the bidders list at minimum
annually by license type, and qualifications.
Informal Bidding
PCC 22034 - All contractors on the list for the category of work being bid OR
all construction trade journals specified in Section 22036, or both, shall be
mailed* a notice inviting informal bids unless the product or service is
proprietary.
– The notice shall be sent at least 10 days prior to bid opening.
– All standard public contract and labor code requirements must be met
including but not limited to prevailing wages, payment bond for
projects in excess of $25,000, fingerprinting, escrow agreement, DVBE,
labor compliance, etc.
– The authority to award informal contracts may be delegated.
– Contracts may be awarded up to $175,000. When all bids received are
above $175,000, a contract may be awarded up to $187,500.
Formal Bidding
• Formal bids are let using the standard bid process as outlined in Public
Contract Code (for Counties – 20120)
• Notice to Contractors – Changes from 10-day to 15-day notice per
Government code 6062
• The notice shall be published pursuant to government code 6066 –
changes from Bidders List to Trade Journals or a bidders list and trade
journals.
• Governing Board must first approve plans and specifications, and must
approve final contract award.
“Emergency”
“Emergency”
• A “sudden, unexpected occurrence
• that poses a clear and imminent danger,
• requiring immediate action
• to prevent or mitigate the loss or impairment of
life, health, property or essential public services.”
(PCC Section 1102)
Emergency Contracts
In cases of emergency when repair or replacements are
necessary
• The governing board may proceed at once to replace or
repair any public facility without adopting plans,
specifications, strain sheets, or working details, or giving
notice for bids to let contracts.
• The governing board may direct the work to be done by day
labor, by contractor, or by a combination of the two.
Emergency Contracts
In cases of emergency when repair or replacements are
necessary
• The governing board, By a four-fifths vote may:
– repair or replace a public facility
– take any directly related and immediate action required
by that emergency
– procure the necessary equipment, services, and supplies
for those purposes
All without giving notice for bids to let
contracts
Emergency Contracts
In cases of emergency when repair or replacements are
necessary
• The authority to enter emergency contracts may be
delegated by a four-fifths vote of the governing board
– as long as the designee takes the action to the governing
board within 7 days
– or at its next regularly scheduled meeting which shall be
no more than 14 days after the action was taken
– The designee must report at each following meeting until
the action is terminated (contract completed)
 Code is in conflict with boards that meet on a monthly
basis.
CUPCCAA Benefits
• Increased force account limits
• Informal bidding procedures for projects within
$45,000 -$175,000
• Reduce number of formal bids
• Expedited contracting for small projects
Common Concerns
• Cost accounting policy and procedures
• Informal bidding procedures
• Accounting review procedures
Section 2 – Contracting Options
Summary Table of Public Works Contracting Methods and Authority
Type of Project
Project Cost
Contracting Options
Awarding Authority
Materials and Supplies
<=$3,500
Purchase Order (no bids required)
Purchasing Agent
<=$6,500
Purchase Order (no bids required)
Purchasing Agent
Formal Bid
Board*
Informal Bid (CUPCCAA)
Chief Deputy CE / Designee
Force Account
Performed by County Staff
Purchase Order (CUPCCAA)
Purchasing Agent
Negotiated Contract
Varies
<=$45,000
New Construction
>=$2,500,000
Roadwork (SacDOT only)
Maintenance, Repair, Remodeling, Minor
Alterations (including Roadways and Bridges)
SCC 2.56
PCC 20131
SCC 2.56
PCC 22000 et seq
SCC 2.56, 2.61.058
Formal Bid
Board*
PCC 22000 et seq
Chief Deputy CE / Designee
SCC 2.61.058, 2.155
Formal Bid
Board*
PCC 22000 et seq
Formal Bid
Design-Build
Board*
PCC 22000 et seq
PCC 20133
<30% of force account work as of January 1
Force Account subject to prior notice
Road Commissioner / Board
PCC 20395, 22031
$ Limits Above
Same Options as Above
Same as Above
Same as Above
<=$3,000,000
Board for Initial Award; Tasks:
adjusted annually since 1998 to reflect % change
in California CPI
JOC
<=$50,000 Director, DGS <=$100,000 Chief
Deputy CE, ISA
(now +/-$4,464,000)
PCC 20128.5
RSO# 2013-0296
>$100,000 CEO / designee
<=$25,000
Negotiated Contract
<=$50,000
48-Hour Informal Bid
>$45,000
Roadways/Bridges – Maintenance and Repair
(SacDOT only)
PCC 20131
Informal Bid (CUPCCAA)
>$45,000 and <=$175,000
>$175,000
Statute
Chief Deputy CE / Designee
PCC 20394
Purchasing Agent
SCC 2.61.053, 2.61.054
Chief Deputy CE / Designee
PCC 20394.5
Purchasing Agent
SCC 2.61.055
Force Account subject to prior notice
Road Commissioner / Board
PCC 20395, 22031
$ Limits Above
Same Options as Above
Same as Above
Any $ limit
Emergency Contract
Board**
Emergency
PCC 22035, 22050
SCC 2.61.056
Developing Procedures
1. Contracting Method
2. Plans and
Specifications
3. Risk Assessment and
Insurance
4. Payment and
Performance Bonds
5. Prevailing Wages
6. Notice to Contractors
7. Bid Form and Bidding
8. Protests/Requests for
Relief/Substitutions
9. Award of Contract
10. Contract
Administration and
Management
11. Change Orders
12. Compensation
13. Project Completion
14. Records Retention
Performance & Payment Bonds
• Payment bonds are required for projects exceeding $25,000 (Civil
Code Sections 9550, 9552).
• Performance bonds are required for construction projects (PCC
Section 20129(b)).
• Contracting via Purchase Order does not cancel the requirement for
payment and performance bonds. (Note: stop payment notices
apply to purchase orders, so payment bonds are needed with
purchase orders.)
• Performance bonds are the leverage to get work completed if the
contractor defaults and to get warranty work done.
Prevailing Wages
• Prevailing wages are required for all public works
projects exceeding $1,000…
• With our (Sac County) Labor Compliance Program, the
threshold increases to $15,000 for maintenance and
repair projects and to $25,000 for construction projects.
• For federally funded projects, notwithstanding our LCP,
the threshold is $2,000.
• How to determine if prevailing wages are required?
Senate Bill 854
IMMEDIATE CHANGES
• Duty to notify DIR when awarding a contract for a
public works project, using the online PWC-100
form.
– This requirement, found in Labor Code Section
1773.3, now applies to all public works projects.
Previously it applied to projects costing greater
than $30,000.
Senate Bill 854
IMMEDIATE CHANGES
• Elimination of the obligation to pay DIR for compliance
monitoring on state bond-funded projects and other
projects that required use of DIR's Compliance
Monitoring Unit (CMU).
– DIR will continue to monitor compliance on these projects but
will not charge awarding bodies for any services provided on or
after June 20, 2014 [the effective date of SB 854].
– The alternative of using a DIR-approved Labor Compliance
Program (LCP) or a project labor agreement in lieu of the CMU
on one of these projects has also been eliminated. However, for
ongoing projects that were using one of the alternatives,
monitoring should continue until the project is completed.
Senate Bill 854
PHASED-IN CHANGES
I. Public Works Contractor Registration Program
o All contractors and subcontractors who bid or work on a
public works project must register and pay an annual fee
to DIR.
o July 1, 2014: Registration program became effective and first
contractors registered. Initial registrations will be valid through June
30, 2015.
o March 1, 2015: No contractor or subcontractor may be listed on a
bid proposal for a public works project unless registered with DIR.
o April 1, 2015: No contractor or subcontractor may work on a public
works project unless registered with DIR.
Senate Bill 854
PHASED-IN CHANGES
I. Public Works Contractor Registration Program
• Once the registration requirement becomes mandatory
(March 1, 2015 for bids and April 1, 2015 for work), an
awarding body may not accept a bid or enter into a
contract for public work with an unregistered contractor.
o DIR maintains an up-to-date listing of registered contractors.
o There are exceptions to the registration requirement for bidders
in circumstances where a CSLB license would not be required at
the time of bidding.
o Additional exceptions and protections are included in the
registration laws to limit bid challenges, allow some violations to
be cured through payment of penalty fees, and allow unregistered
contractors to be replaced with registered ones.
Senate Bill 854
PHASED-IN CHANGES
II. NOTICE REQUIREMENTS
• January 1, 2015: The call for bids and contract documents
must include the following information:
– No contractor or subcontractor may be listed on a bid proposal for a public
works project (submitted on or after March 1, 2015) unless registered with the
Department of Industrial Relations pursuant to Labor Code section 1725.5
[with limited exceptions from this requirement for bid purposes only under
Labor Code section 1771.1(a)].
– No contractor or subcontractor may be awarded a contract for public work on
a public works project (awarded on or after April 1, 2015) unless registered
with the Department of Industrial Relations pursuant to Labor Code section
1725.5.
– This project is subject to compliance monitoring and enforcement by the
Department of Industrial Relations.
Senate Bill 854
PHASED-IN CHANGES
III. FURNISHING OF ELECTRONIC CERTIFIED PAYROLL RECORDS TO LABOR
COMMISSIONER
• All contractors and subcontractors must furnish electronic certified
payroll records directly to the Labor Commissioner (aka Division of Labor
Standards Enforcement). The phase-in timetable for this requirement is as
follows:
June 20, 2014 [immediate]: Any project that was being monitored by the
CMU/Labor Commissioner prior to the adoption of SB 854 will continue to be
monitored by the Labor Commissioner afterward; and the contractors on those
projects must continue to furnish certified payroll records to the Labor
Commissioner until the project is complete.
April 1, 2015: For all new projects awarded on or after this date, the
contractors and subcontractors must furnish electronic certified payroll records
to the Labor Commissioner.
Anytime: For projects besides those listed above, the Labor Commissioner may
at any time require the contractors and subcontractors to furnish electronic
certified payroll records. The Labor Commissioner anticipates requiring this for
green energy school projects that receive Proposition 39 funding.
Senate Bill 854
PHASED-IN CHANGES
III. FURNISHING OF ELECTRONIC CERTIFIED PAYROLL RECORDS TO LABOR
COMMISSIONER
• All contractors and subcontractors must furnish electronic certified
payroll records directly to the Labor Commissioner (aka Division of Labor
Standards Enforcement). The phase-in timetable for this requirement is as
follows (continued):
•
January 1, 2016: The requirement to furnish electronic certified payroll records
to the Labor Commissioner will apply to all public works projects, whether new
or ongoing.
Exceptions: The Labor Commissioner may (but is not required to) excuse
contractors and subcontractors from furnishing electronic certified payroll
records to the Labor Commissioner on a project that is under the jurisdiction of
one of the four legacy DIR-approved labor compliance programs (Caltrans, City
of Los Angeles, Los Angeles Unified School District, and County of Sacramento)
or that is covered by a qualifying project labor agreement.
These new requirements will apply to all public works that are subject to the
prevailing wage requirements of the Labor Code, without regard to funding
source.
Questions?
Contact information:
• John Finney, Contract Services Manager
916-876-6368
[email protected]
• Tracy Soth, Senior Contract Services Officer
916-876-6285
[email protected]
Questions?
Contact information:
• Public Contract Code
www.leginfo.ca.gov/cgi-bin/calawquery?codesection=pcc
• California State Controller
http://www.sco.ca.gov/ard_cuccac.html
• Local Government Policies – Lilian Apgar (State Controllers
office) 3301 C Street, Suite 740 Sacramento
[email protected]
The End

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