Monthly Archives: October 2018

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Enforcement Is As Important As Getting A Bill Passed banner

Enforcement Is As Important As Getting A Bill Passed

Among the many lessons taught to us in Sacramento is that it is one thing to pass a bill into law, and quite another to make sure that somebody enforces that law.

We got to be “somebody” in the case of Assembly Bill 720 (2011), known as the Road Commissioner Act. AB 720 was a bill that CIFAC and our member firms and associations pushed to end the practice of almost unlimited construction under the 19th Century Public Contract Code rules for counties. We had to come back to the legislature in 2015 to provide a few amendments, mostly agreed to by both sides of the issue, after the real world showed some areas in the process could be improved.

The way Public Contract Code Chapter 630 (that’s where the bill ended up) works is that counties who are a signatory to the California Uniform Public Construction Cost Accounting Act (CUCCAA) may informally bid new construction projects of $45,000 up to $174,999. All projects valued at $175,000 or more shall (must be) put out to formal bidding procedures.

Counties using the Road Commissioner Exemption are not required to bid all construction work done under the Road Commissioner Authority, but the projects must be declared publicly before commencing work. The big stick here is that Road Commissioner work is subject to a 30 percent cap of all force account work done under the Road Commissioner exemption from the previous fiscal year.

Because these counties would be required to limit their force account road work to the numbers found in the prior year’s State Controller’s Annual Streets and Roads Report, it hamstrings their current activities and limits any growth. For instance, if a county did very little road work by force account that did not involve maintenance the prior year, but in the current year faces a situation that requires a large amount of road reconstruction, then that county would be limited to 30 percent of that lower amount from the prior year regardless of the circumstance.

Determining that 30 percent limitation is where CIFAC enforcement comes in. We use what is reported by the State Controller’s office to calculate the 30 percent cap for the coming fiscal. We do the research, and we keep an eye on the counties who have stayed away from CUCCAA guidance.

CIFAC does this annually when the Controller’s Report becomes available. Once a Road Commissioner project is declared, a signatory county may not subtract the value of designated categories or cost elements on that project to stay below their 30 percent threshold for any given year. In plain English, that means you cannot pick a project apart to stay under the cap once it’s declared.

So, CIFAC is doing what was set up to do—protect the interests of private construction companies and their employees—and that means getting a bill passed and then helping to enforce it.


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Agencies and Annual Maintenance Contracts

By Anthony (Tony) Morelli, Southwestern Regional Compliance Manager. -

Recently I observed a Public Work’s Director proposing to his City Council, the extension of a contractor’s $300,000 contract for the City’s annual sidewalk, curb, gutter and driveway repair or replacement maintenance contract. In looking at the background information, my concern was whether the project was ever formally put out to bid. Upon further investigation, I was able to determine that this was actually going to be the eighth extension with the same contractor! How can they do that you ask?Tony Morelli, Southwestern Regional Compliance Manager

Well, Public Agencies do have the flexibility to utilize annual maintenance contracts for regular, repetitive, routine or recurring maintenance. We see annual contracts being used for; landscaping, tree trimming, fire sprinkler service and testing, building maintenance or sidewalk, curb, gutter and driveway repair or replacement.

There are several components that an agency must include in utilizing the annual maintenance contract procurement method.

  • The agency must still follow the California Public Contract Code (PCC) laws, so initially the annual maintenance contract for the project must be formally bid out.
  • The Agency must follow the definitions as outlined in PCC 22002, (Maintenance) Which is defined as; Routine, recurring and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes.
  • In the original contact, the agency can stipulate the term, usually one-year, (I have also seen three to five year contracts) usually with a clause that allows the agency to extend the contract one (or more) years at a time, if both parties agree and the governmental board or city council votes to approve the extension. There may also be clause included that allows either party to terminate the contract, as well.
  • The Agency (at their option, but not very likely) may also include or allow the contractor a minimal unit price increase, as long as it follows the Consumer Price Index (CPI) and as long as this clause and details are included in the extension agreement.

So back to my concern with the above agency’s awarding the eighth-year renewal contract extension to the contractor. I made a formal Public Records Act request to see the original contract between the City and the contractor. Upon reviewing the contract, it did in fact have all of the required components, so the City was legally within their right to extend the contract. I suggested that perhaps they should at least consider re-bidding it out after no more than three years, believing that the City was more likely to obtain favorable pricing by utilizing the competitive bidding process.

-Bottom line… You can lead a horse to water, but you can’t make him drink!


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Opting-in, The Final Step

By Matthew (Matt) Hilliard, Bay Area Regional Compliance Manager. -

As a big supporter of local agencies adopting the California Uniform Construction Cost Accounting Act (CUCCAA), The Construction Industry Force Account Council (CIFAC) must take every step to ensure that if an agency is using the provisions in CUCCAA, that they have followed all the proper procedures to become signatory and are in full compliance with the Act. CIFAC supports the Act because it creates an increase in project advertisement and project accounting requirements over the State's General Law. Both of which create greater transparency and in turn, obligates agencies to stay compliant with the Public Contract Code.Matthew (Matt) Hilliard, Bay Area Regional Compliance Manager

Whether it be a County, City/Town, School District or a Special District, all local agencies that want to become signatory to CUCCAA must first pass a resolution through their governing board to become subject to the uniform construction cost accounting procedures. The resolution shall specify that the local agency will meet the requirement prescribed in the Act.

An additional requirement is that an informal bidding ordinance shall be enacted by the participating agency. Informal bidding is not allowed by State General Law but is allowed once an agency becomes signatory to the Act.

The final step, which seems to be overlooked in some cases, is that the agency “opting-in” to CUCCAA, must notify the Office of the State Controller in writing of the election to become subject to the uniform construction cost accounting procedures and include a copy of the resolution.

CIFAC’s Regional Compliance Managers (RCM), both in Northern and Southern California have encountered on numerous occasions, agencies whose governing board have past the resolution to become subject to the Act and have created the informal bidding ordinance, but are out of compliance because they did not take the final step of notifying the Office of the State Controller. In an effort to help with this compliance issue, our RCM will often provide guidance to the agency, directing them on how to become compliant with the Act. If you have any questions in regards to CUCCAA or other Public Contract Code questions please contact CIFAC at 1-800-755-3354 or visit us on the web at www.cifac.org.