how full is your cupccaa? - casbo.org full... · how full is your cupccaa? phil henderson orbach...
TRANSCRIPT
How Full is Your CUPCCAA?
Phil Henderson
Orbach Huff Suarez & Henderson
April 2017CASBO 2017 Annual Conference
Gioconda Padilla
Glendale Unified School District
California School District Procurement Generally
Bid Limits. California school districts must formally and publicly bid contracts for construction projects over $15,000, unless there is an exception. (Public Contract Code (“PCC”) § 20111)
CUPCCAA Exception. Exception to this general rule for school districts and other local agencies that elect to be subject to the California Uniform Public Construction Cost Accounting Act (“CUPCCAA”). (PCC §§ 22000 – 22045.)
What is CUPCCAA?
Allows local agencies to perform public projects up to certain amounts with their own workforces (“Force Account”) or by negotiated contract.
Provides for alternative (“informal”) bidding procedures when an agency performs public projects up to certain amounts.
The agency must follow specific accounting procedures.
Bid Limits Under the ActPublic projects of $45,000 or less may be performed by negotiated contract or with the District’s own workforces (“Force Account”).
Public projects of $175,000 or less may be let to contract by the informal procedures set forth in the Act.
Public projects of more than $175,000 shall be let to contract by formal bidding procedures, including:
Detailed architectural plans, voluminous bid and contract documents,
Newspaper advertising for 14 days before bid opening;
Notice in trade journals 15 days before bid opening;
Other more detailed steps and processes.
(PCC §§ 22032 (a) - (c); PCC § 22037.)
Implementation of CUPCCAA
Governing Board approves resolution to become subject to CUPCCAA procedures.
District files resolution with Controller.
Entire District becomes subject to the Act.
Board enacts informal bidding regulations under PCC § 22034 establishing list of contractors to be notified of potential projects and procedures for informal bidding.
Establishing and Maintaining List of Qualified Contractors
Each November, District mails written notice to designated trade journals, inviting all licensed contractors to submit firm names and required information for inclusion on qualified bidders list for following calendar year.
District can elect to start the program prior to November and must then re-invite contractors in November.
District creates updated contractors list next January 1.
May include any contractors’ names it desires.
Must include contractors providing required information during calendar year or prior November or December.
Contractor may have firm added to list by providing required information at any time.
Commission recommends inclusion of all contractors who submitted one or more valid bids during preceding year.
Procedures for Informal Bidding
Procedures for informal bidding:
District maintains list of qualified contractors, identified by work category;
District mails notice inviting bids at least 10 days before bids due to:
All contractors on list for category of work; or
Specified trade journals; or
Both.
Notice should describe project in general terms with information for how to obtain detailed information and time and place for submission of bids.
Will often include site walk, where appropriate.
Procedures for Informal Bidding, Cont’d.
Notice need not include drawings, plans, etc., unless required for preparing bid.
Governing Board may delegate authority to award informal contracts to specific staff members (e.g., to Superintendent).
If all bids received exceed $175,000, Governing Board may pass four-fifths resolution awarding contract at $187,500 or less to lowest responsible bidder if it determines District’s cost estimate was reasonable.
Procedures for Formal Bidding
Public projects of more than $175,000 shall
be let to contract by formal bidding
procedures, including:
Detailed architectural plans, standard bid and
contract documents,
Newspaper advertising for 14 days before bid
opening;
Notice in trade journals 15 days before bid opening;
Other more detailed steps and processes.
CUPCCAA Contracts Are Still Public Works Contracts
Contractor Must Pay Prevailing Wages. (Ed. Code §17424)
Bid Bond / Bid Security Required
CUPCCAA does not waive the statutory requirement for a bid bond. (PCC §20111(b).)
Payment Bond Required
Civil Code § 3247: “Every original contractor to whom is awarded a contract by a public entity . . . in excess . . . of $25,000 for any public work shall file a payment bond.”
Get a performance bond too.
Fingerprinting. (Ed. Code §45125, et seq.)
Field Act Compliance Required. Construction is subject to all State approvals, as set forth in Education Code sections 17280 through 17313. (Ed. Code §17421.)
What is Force Account?Work performed on public projects using internal resources, including labor, equipment, materials, supplies, and subcontracts.
Project costs for force account work include the following:
Direct Costs:
Labor (employee) including all benefit costs
Equipment charged on an hourly rate including depreciation, insurance, maint./repair, fuel and oil, tires and grease, etc.
Cost of materials and supplies with a total unit value of $25 or more including discounts, tax, and shipping.
Plus, [see next slide:]
What is Force Account?, cont’d.…
Indirect Costs:
Other labor including inspection, clerical, and supervision.
Other expenses including utilities, telephone, temp. fencing, etc.
Overhead Costs:
Either the agency’s actual overhead rate or 30% of direct costs
The Commission has determined that compliance with
the Standard Accounting Code Structure meets the
requirements of the Act.
What is Force Account?, cont’d.
The tracking of projects completed by Force Account is not daunting. SACS allows districts to account by fund, resource, program, and object code. Project tracking can be done within the financial system:
Labor: Fund Sub-Fd Resource Goal Function Object Loc. Prog. Resp. Proj. Yr.01 01 XXXX 0000 8100 2201 117 XXX 110 00Equipment: Fund Sub-Fd Resource Goal Function Object Loc. Prog. Resp. Proj. Yr.01 01 XXXX 0000 8100 5710 117 XXX 110 00Materials & Supplies: Fund Sub-Fd Resource Goal Function Object Loc. Prog. Resp. Proj. Yr.01 01 XXXX 0000 8100 4300 117 XXX 110 00
What is Force Account?, cont’d.A District may reject all bids presented on a project.
The District then can reevaluate its cost estimates for the project and either:
Abandon the project or readvertise for bids again, or
Pass a four-fifths resolution declaring the project can be performed by Force Account.
This provision is a rarely-used option for school districts, but may be a useful tool. Discuss with your legal counsel in more detail the implications and ramifications if the District ever opts to utilize this process.
No Bids Received. If no bids are received through the formal or informal process, a District may perform the project by Force Account or negotiated contract without further complying with CUPCCAA procedures.
(PCC § 22038.)
Emergency ContractsThe work may be done by day labor under the direction of the
governing board, by contractor, or by a combination of the
two.
By a four-fifths vote of the governing board, may repair or
replace a public facility, take any directly related and
immediate action required by that emergency, and procure the
necessary equipment, services, and supplies for those
purposes, without giving notice for bids to let contracts.
By a four-fifths vote of the governing board, the authority to
enter emergency contracts may be delegated. The designee
must report at each following meeting until the action is
terminated (contract completed).
The Entire District Would be Subject to CUPCCAA
“A public agency which has…elected to become
subject to [CUPCCAA], may utilize the bidding
procedures set forth in [CUPCCAA] when
contracting for "maintenance work," as defined
in Section 22002, or when contracting for any
other work which does not fall within the
definition of "public project," as defined in
Section 22002 [like repairs].”
(PCC §22003, emphasis added.)
The Entire District Would be Subject to CUPCCAA
So, for maintenance and/or repairs, the District may
choose to informally bid for maintenance within the
"donut hole" from $45,001 to $88,300 (the current bid
limit for repairs and maintenance).
Most Districts include maintenance (and repairs) in its
CUPCCAA resolution.
If the District excludes repairs and maintenance, the bid limit for
formal contracts for repairs and maintenance would remain at
$88,300 for school districts rather than $175,000.
(PCC §22003.)
What is a “Public Project”?
“Public Project” per PCC §§ 22002(c) – These are
not Repairs or Maintenance
(1) Construction, reconstruction, erection,
alteration, renovation, improvement, demolition,
and repair work involving any publicly owned,
leased, or operated facility.
(2) Painting or repainting of any publicly owned,
leased, or operated facility.
(Emphasis added. Note inclusion of “repair”…)
What is “Maintenance”?Maintenance (per PCC §§ 22002(d))
(1) Routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes.
(2) Minor repainting.
(3) Resurfacing of streets and highways at less than one inch.
(4) Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems.
What is a “Repair”?
Cases Interpreting What is a “Repair”
“The word ‘repair’ in its ordinary sense relates to the preservation of property in its original condition, and does not carry the connotation that a new thing should be made or a distinct entity created. (2) Minor repainting.” (Whalen v. Ruiz (1953) 40 Cal.2d 294, 300-301, 253 P.2d 457.)
“To repair means to mend an old thing, not to make a new thing; to restore to a sound state something which has become partially dilapidated, not to create something which has no existence.” ( Id., 40 Cal.2d at p. 300, 253 P.2d 457.)
Factors to ConsiderWhat could be recurring projects that preserve or protect school facilities in the District is a factual determination. Some factors to Consider:
The facility needs to be currently in existence.
The work needs to be routine, recurring, and usual.
The need for the work must be based on keeping the facility in functioning and useful order or to preserve it for future use.
PUBLIC PROJECT MAINTENANCE WORK
Painting an entire school
< GREY >< AREA >
Any variations between the
examples within these two categories must be evaluated on a case-by-case basis.
________< GREY >< AREA >
Painting over graffiti; repainting a portion of a damaged school
Replacing multiple HVAC units at a site
Replacing one failing HVAC unit at a site
Replacing all fencing at a site Replacing a portion of a site’s aged cyclone fence
Replacing all plumbing fixtures in the bathrooms at a site
Replacing rusted components of plumbing fixtures in one bathroom
Building a “snack shack” at a field Patching the roof of a snack shack at one field
Installing bleachers at a field Re-finishing portions of wooden seats on some bleachers at one field.
Re-paving a parking lot if depth is greater than 1 inch
Re-paving a parking lot if depth is less than 1 inch
Replacing multiple windows at a site
Fixing a few single cracked windows at a site
Installing new grass at a field Mowing, trimming, planting replacement bushes
Replacing a portion of a sprinkler system at a site
Inspecting/fixing a few parts of a sprinkler system at a site
Purchase of Materials Under CUPCCAA
Can Informal Bidding Procedures Be Used For Purchase of Materials?
Only if materials are consumed on a public contract subject to and defined by the policies and procedures manual.
How Full is Your CUPCCAA?
Phil Henderson
Orbach Huff Suarez & Henderson
April 2017CASBO 2017 Annual Conference
Gioconda Padilla
Glendale Unified School District