Pending bill affecting Bidding Practices for Public Works Projects in California

Joseph Hanna

by Joseph M. Hanna

The California Assembly is considering AB 2390 which, if passed, will affect how all bids are prepared and submitted for public works projects in California under Public Contract Code§3300 and §4104. This pending bill applies only to contractors who contract directly with the public entity. A public entity consists of the state, county, city, city and county, district, public authority, public agency, municipal corporation, or any other political subdivision or public corporation in the state.

The proposed changes are:

Existing law requires a public entity, the University of California, and the California State University to specify for inclusion in any plans and notice prepared for a public project the classification of the contractor’s license, which a contractor is required to possess at the time a contract is awarded. This bill would instead require the contractor to possess that license at the time the contractor makes a bid or offer to perform the work, and would also require a contractor to possess current, valid workers’ compensation insurance at that time.

Also, the Subletting and Subcontracting Fair Practices Act requires the entity taking bids for public works to specify that any person making a bid or offer set forth the name and location of the place of business of each subcontractor who will perform work or labor or render service to the prime contractor, or a subcontractor who, under subcontract to the prime contractor, specially fabricates and installs a portion of the work according to specifications, in an amount in excess of one-half of 1% of the prime contractor’s total bid, or in the case of bids or offers for the construction of streets or highways, including bridges, in an amount in excess of one-half of 1% of the prime contractor’s total bid or $10,000, whichever is greater. This bill would instead require the person making a bid or offer to set forth, in addition to each subcontractor’s name and business location, the current, valid license number issued by the State of California, and proof of current, valid worker’s compensation insurance of each subcontractor who will perform work.

If this law is enacted and the required information is not included in the bid, it could be grounds for challenge by other bidders.

A copy of the bill with amendments to Public Contract Code §§3300 and 4104, AB 2390 (437)

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