Author Archives: CIFAC Staff

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Rules and Benefits of Advertising banner

The Rules and Benefits of Advertising

When a public agency decides to move forward with bidding out a public project, advertising requirements come into play.

Different agencies will have different rules to follow based on their individual procurement policies, but all must abide by the requirements set forth in the Public Contract Code (PCC). Depending on the type of public agency, some of these include; notifying a maintained list of qualified contractors, sending bid invitations to construction trade journals, or posting in a local newspaper of general circulation. Advertising requirements such as these are put in place for a reason. Simply put, the wider your outreach, the more likely you are to receive the best price possible. This is important for public agencies, as the money they spend is coming from tax-payers.

In this day and age, expanding your search for a qualified contractor has never been easier. State-wide construction trade journals such as Construction Bidboard (www.eBidboard.com) and Dodge Data & Analytics (www.construction.com) are very useful resources for getting a project in front of a large audience of contractors. These websites post thousands of projects a day and provide details regarding the scope of work and deadlines for bids. In addition, there are numerous local trade journals, builders’ exchanges, and contractor associations spread throughout the state for advertising of projects online and to their memberships as well.

Another option which can be useful to agencies is to maintain a qualified contractors list. Directly reaching out to the contractor by way of mail, fax, or e-mail can draw a contractor’s attention and yield you a higher chance of getting more bids. Agencies who have opted into to the California Uniform Public Construction Cost Accounting Act (the Act) can utilize this method as their sole advertising method on smaller projects (under $175,000). While it is not normally recommended to use only one avenue for outreach, it can be a way to speed up the procurement process on projects that are on a tight timeframe.

The timeless method of advertising a public project is to post in the classifieds of a local newspaper. This has been a method used for many years and can still draw a lot of success. However, combining this type of advertising with one (or both) of the methods listed above will surely get you more responsive and responsible bidders submitting proposals.

CIFAC recommends advertising in every way possible. We monitor public agencies to ensure they are abiding by the advertising requirements outlined in the PCC. Larger outreach not only helps to level the playing field for contractors, but it ends up saving the tax-payer and public agency money in the end. It’s a win-win for all.


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Whack-A-Mole in Cal State Housing Projects Banner

Whack-A-Mole in Cal State Housing Projects

Do any of you remember the penny arcade game called Whack-A-Mole? 

It’s a real simple game—you have a rubber mallet and you have to hit the “mole” when it pops up out of a hole—with the only problem being that there are lots of holes and the moles travel unseen underground, popping up when you least expect them.

In many ways, it’s a lot like trying to do battle with public entities that are constantly trying to evade the requirements of the Public Contract Code (PCC), California Uniform Construction Cost Accounting Act (CUCCAA) and prevailing wage laws. In recent years we have been challenged by local school districts using a twisted public/private concept called “lease-leaseback,” which led to concerns about corruption and collusion in the selection of contractors in addition to the all the other issues with public construction.

The latest “mole” is the interesting case of California state universities using a private contracting firm to build student housing a few blocks from the campus with only a “possibility” of later acquiring the housing units for “a public purpose.”

Pretty slick, right? The university can claim that it does not own the new housing unit and thus it does not fall under the PCC, CUCCAA, Department of Industrial Relations public works registration or prevailing wage. Because the contractor does not have to play the game under the rules binding California’s public works contractors, nor, in this case even competitively bid the work, they can claim to save the university money while making a better profit margin.

We came across this scheme wrapped around one of these off-campus housing projects in Arcata, home to Cal State Humboldt. CIFAC has been actively working with officials to stop their approval of the construction activities until they meet the laws for public works in California, along with the Humboldt and Del Norte Central Labor Council, AFL CIO and other concerned citizens.

As part of our research on this issue, we found that the contractor on the Humboldt State project has several similar jobs either completed or lined up including:

  • Promontory, 176 apartments, CSU Monterey Bay
  • The Vista, 180 units/660 beds, CSU, Stanislaus
  • The Crossings, 225 units/750 beds, CSU Sacramento
  • The Post on Nord, 173 units/625 beds, CSU Chico
  • The Village 240 units/800 beds, Cal State
  • The Graduate, 260 units/1,039 beds, San Jose State University

On their website, the contractor, which does multi-family residential construction in Texas and Washington also, says it entered this market in 2012 and “is already a preferred provider among California universities.”

Where We Are Now

After six public hearings on the plan, the Arcata City Council found itself deadlocked on the issue and when it came out with a tie vote on August 29th, the matter was declared defeated. Several Council members agreed with CIFAC, that this appeared to be a University project that should be bid with state wages paid.

We are not opposed to the construction of more off-campus housing to support our state universities, just the projects that blatantly attempt an end-run around the laws that protect the public, the contractors and even the agencies involved.


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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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Public Works Sidewalk repair banner

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 Banner

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.


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Contracting by Local Agencies – California Competitive Bidding Laws

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

California competitive bidding laws are intended to eliminate the awarding local agency from showing favoritism or in some cases trying to commit fraud and preventing the misuse of public funds. Contracting by local agencies laws are addressed in the California Public Contract Code (PCC), in sections 20100 through 22178. The PCC addresses many specific specifications of the laws surrounding public contracting and should be reviewed if you plan to bid public works projects. For this article, we will focus on the process. One important note, any contractor who bids on or enters into a contract to perform public works projects is required to register with the Department of Industrial Relations.Matthew (Matt) Hilliard, Bay Area Regional Compliance Manager

We’ll start off with some clarification; there are some categories of work that are in some cases, excused from competitive bidding depending on the type of agency. These categories can include specialized personal services, emergency work, maintenance and new projects that don’t reach the local agencies force account limit or bid threshold (dollar amount) that is specified in the PCC, in the city bylaws or charter of the city.

Advertising for Bids

Once a public agency reviews and approves an estimate received by the agency’s City Engineer or a project-engineering consultant, their governing board will vote to give their Public Works Director or designee the authority to advertise for bids. This is one of the major components that creates transparency in this process and allows contractors and the public to view the specifications of the project. Depending on the agency’s own advertising requirements, this can be done in newspapers, centralized community notification boards, and electronic bid-boards online. Contractors submit sealed bids based on the project specifications outlined in the engineers’ estimate. The bids will be publicly opened on a date set by the agency.

Award of Contracts

There are a couple of methods the awarding agencies use, depending on the requirements of the agency, to award a contract. The first, and the most commonly used method, is to award the contract to the lowest responsible and responsive bidder. 

Here is what that means; a responsible bidder must be a licensed contractor who has not been barred from government contracts for prior misconduct. In addition, a responsible bidder must have the equipment and skills necessary to perform the work in question or have a sub-contractor who has those particular skills. If the bidder is deemed not responsible because they do not meet the above criteria, the public agency need not award the contract to the lowest bidder.

The next requirement in the first method is that the bid be responsive. Quite simply, the bid must be an offer to provide the goods and services that are being bid upon and the bid must comply with all procedures that are set forth in the requirements of the bid documents. For example, a bid, which excludes a portion of the work, which was outlined in the specifications, is deemed non-responsive.

The second, less commonly used method to award a contract is to use the “best value system.” Best Value means a value determined by objective criteria, including, but not limited to, price, features, functions, life cycle costs, and other criteria deemed appropriate by the entity. The use of “best value” is limited. CIFAC currently see it used in relationship to design-build projects and lease leaseback contracts but it may be used with design-bid-build delivery.

Reject Bids

The public agency has authority and discretion to reject all bids and to re-advertise. This usually takes place when all bids exceed the amount the agency has budgeted for the work. The public agency may reject any bids presented, if the agency, prior to rejecting all bids furnishes written notice to bidders. The notice shall inform the bidders of the agency’s intention to reject the bid and shall be mailed at least two business days prior to the hearing at which the agency intends to reject the bid.

Bid Protests

Finally, CIFAC can help contractors review the bidding process if they feel that the agency is not complying with their own competitive bidding regulations. If a protest to the awarding agency is require, the contractor should draft a letter immediately as to the reason for the protest. The contractor protesting should go before the agencies governing body at the time they will vote on awarding or rejecting the bid to argue their case. If the protesting bidder is unsuccessful, it may want to consider seeking court intervention. Such court intervention should be sought within a few days of the public entity voting to award the contract to another bidder.


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Networking Banner

3 Reasons Why Networking is Essential in Our Industry

By Jamie Watkins, Southeastern Regional Compliance Manager. -

As Regional Compliance Managers we have opportunities to meet many of our partners at networking events. These occasions have allowed us to introduce ourselves, share what we do and build relationships. Most people are intrigued by our organization and want to know more. Networking is critical with the work we do and here are three reasons why:Jamie Watkins, Southeastern Regional Compliance Manager

1. WE CAN SHARE OUR KNOWLEDGE WITH PEOPLE IN THE CONSTRUCTION INDUSTRY

When we have the chance to attend network-meeting events, we are able to share what exactly CIFAC’s mission and purpose is and how our organization can help make sure state and local government agencies are complying with the Public Contract Code. We share the importance of following the code and how it creates more job opportunities, fair bidding and transparency. Most people are not aware of the legislation CIFAC has passed and how we have countlessly influenced agencies to abide with the code. We are also able to share the different ways agencies violate the Public Contract Code, which then leads to more conversations on how we, here at CIFAC, can counteract that.

2. NETWORKING LEADS TO REFERRALS

Oftentimes when we meet people at construction industry associations, many contractors and labor unions share with us issues they have had with the bidding process. We are able to discuss face-to-face concerns and share how we can help. Our partners are our eyes and ears in the field and they see firsthand the problems in the community. We are able to explain the process with each investigation we conduct and what the next step is in resolving the problems.

3. ESTABLISH MEANINGFUL CONNECTIONS FOR THE FUTURE

When the CIFAC team connects with people in our construction industry, we are able to have conversations on the importance and significance of the work we do developing strong relationships with our supporters. The more we network and get our name out, the more we can help when our partners see something that is out of compliance and refer to us to investigate. Our ultimate goal is transparency with our supporters and hold the public works industry accountable for code compliance.


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Legislative Alert CUCCAA Bid Threshold Banner

CUCCAA Bid Threshold Limits Raised for 2019

This month, Governor Brown signed AB 2249, the State Controller sponsored bill that raises the bid threshold limits for California Uniform (Public) Construction Cost Accounting Act (Act) participating public agencies commencing January 1, 2019 for public projects.Michelle Tucker, Executive Director
Here is the background of the bill, as reported by the State: The Public Contract Code specifies the procedures that public agencies must follow when they build public works projects, including limits on project costs. The Act was enacted in 1983 as an alternative to these general requirements by allowing increased bid limits as long as participating agencies follow uniform accounting standards and bidding procedures. A voluntary program that is available to all public entities in the State, the Act allows public projects costing $45,000 or less to be performed by the public agency’s force account, by negotiated contract, or by purchase order. Projects costing $175,000 or less can use informal bidding procedures set forth in the Act. Projects that cost more than $175,000 must be put out to bid under formal bidding procedures.
The California Uniform Construction Cost Accounting Commission (Commission) administers the Act and provides technical support to public agencies by prescribing uniform construction cost accounting procedures for agencies that opt in. The Commission also reviews public complaints and recommends audits when the criteria of the Act are not fulfilled. In addition, the Commission conducts meetings open to the public, provides a manual for use by public agencies who are signatory and maintains a Commission web page on the Controller's website. Commissioners also facilitate and participate in outreach and training to participating agencies, candidate agencies, and professional organizations.
The Act requires the Commission to review the force account and bid limits every five years to account changes in public construction costs. If the Commission recommends higher limits, the Controller promulgates the new limits and the Legislature amends the Act to reflect the adjusted amounts. This last occurred via AB 720 (Hall). The Commission on September 28, 2017, passed a resolution recommending that the Controller increase the bid limit to $60,000 from the previous $45,000 limit and to $200,000 from the previous $175,000 limit.
CIFAC monitors agencies to ensure they follow the Act’s requirements and has filed complaints against agencies that are found to be out of compliance.

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Fight to Save SB1 banner

The Fight to Save SB1

"Just when I thought I was out, they pull me back in!"

This signature line is spoken by Michael Corleone in Godfather III, but it could be used by the California heavy civil construction industry to express the frustration over the effort to repeal SB1, now known as The Road Repair and Accountability Act of 2017—a mouthful.

Last year, when the bill passed the legislature and was signed by the governor, the industry was told that, finally, the state would have a solid, stable source of funding for roads and bridges and public transit. Apparently opposition actually believed that $52 billion was going to pour out of the sky and one repeal petition got on the November 6th general election ballot as Proposition 6, the Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative—another mouthful.

How We Got Here

The construction industry, which had been working for 16 long, sometime tough, years to come up with a formula that would actually get the money needed to keep our highways from turning back to gravel. It was a hard road, but we learned from the experiences on the trip.

The industry spent millions to convince voters to pass Prop. 42, the Traffic Congestion Improvement Act. It was just a place holder for a more permanent answer, but Prop. 42 provided that, from 2003–04 through 2007–08, gasoline sales tax revenues were to only used for state and local transportation purposes, allocated under the Transportation Congestion Relief Program begun in 2000.

Then, during the Schwarzenegger administration the industry was tapped for more millions to support Prop. 1B to provide for the issuance of $19.6 billion in state bonds for roads and bridges in 2006. That measure passed and saved the highway and heavy construction industry in California from total destruction in the aftermath of the 2008 economic collapse.

By the time the Brown administration took over, bonds were odoriferous in Sacramento, so the industry worked to build consensus support in the legislature, a law that became known as “the gas tax swap.” It was supposed to take sales taxes off motor fuel and replace them with an increase in motor fuel taxes and be “revenue neutral” so the voters wouldn’t take any notice at all. The only real problem with the gas tax swap was that it was indexed to grow with inflation—but only to the price of oil—which tanked in 2014 and remains as half the cost today that it was then.

SB1 is the answer to that problem. It is based on a solid foundation—a user pays approach—and is indexed to the cost of living in the state that will help keep pace with inflation and provide a good start on repairing our neglected infrastructure.

Polling Looks Bad but its Early

Polls on the measure say 53 percent of the voters want to do away with the tax increase, particularly the much-hated motor vehicle registration fees, which cost Gray Davis his job as governor.

This vote will come in a non-presidential election year, which means that the voters most motivated will be the ones that show up. It also means that less than 30 percent of the voters will likely decide the outcome. The industry is, once again, being called on by the Governor’s office to raise millions to get the right message out and get as many SB1 supporters to the polls as possible.

A growing coalition of industry trade associations and trade unions are working to stop Prop. 6 in November. CIFAC joins our industry supporters in support of this effort.

We started this with a quote from the Godfather and we are going to end it with a short but strong line from Shakespeare that makes the case for where our industry finds itself...once more:

“Once more unto the breach, dear friends, once more!”—From Henry V, Act 3, Scene 1


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Public Works Workers - Charter Cities

CIFAC is Keeping an Eye on Charter Cities

By Michelle Tucker, Executive Director. -

As of last year, there were 121 “charter cities” out of the 485 municipalities in California...and right now it looks like another two want to join that list-- City of Carson (Los Angeles County) and City of El Cerrito (Contra Costa County).

July 17th El Cerrito’s city council put the question on the ballot for the November general election. The real driving issue for the city is to be able to raise taxes on their own. In this case, the city wants to create a “real property transfer tax,” levying residents about $12 for every $1,000 on the price of any house sold in the city limits.Michelle Tucker, Executive Director

The really unusual part is that El Cerrito already receives half the money from the Contra Costa County “real property transfer tax.” There is no word yet on whether that arrangement will continue but you can be sure the county will not stop collecting this additional fee in El Cerrito whether the city of 25,400 enacts its charter proposal or not.

City officials say the additional taxes will go into the general fund, “to be used for improving city resources such as parks, after school programs and public safety,” according to news reports.

 

“An online survey offered to residents found 58 percent supported both the charter and tax, though the issues received only 33 percent and 43 percent respectively when surveyed separately,” according to the East Bay Times.

CIFAC has been monitoring the El Cerrito effort since it surfaced and we have received pledges from the city to continue to follow the Public Contract Code (PCC). We will stay on top of this issue.

Different Story in Carson

Carson is looking to abandon the PCC and create their own procurement requirements. This is obviously a concern to CIFAC. We have spoken to the city, strongly suggesting they adopt the California Uniform Construction Cost Accounting Act (CUCCA) and we sent formal letters with the same message.

At this point, we’re not sure what Carson is going to do on our issues, but, if they fail to adopt protections for the construct process we will likely oppose those actions. The charters we worked on with our network in the past that were defeated included Grover Beach and Arroyo Grande. We also were able to stop Porterville (who is already charter) from exempting the PCC.

The city has yet to adopt a charter but they have produced a 65-page draft and they plan to get it before the city council for approval August 7th. To get it on the November ballot the city must send the council resolution of approval by August 10th, the last day for local jurisdictions to file a resolution with the L.A. County Board of Supervisors requesting consolidation with the General Election.

Cities that adopt their charter may adopt their procedures for matters that are considered “municipal affairs,” which is an important phrase if actually undefined in the code. Almost every law suit involving city charter issues ends up with judges trying to decide what a “municipal affair” is. The California Constitution grants charter cities the power to “make and enforce all ordinances and resolutions concerning municipal affairs” (California Constitution Article XI, Section 5(a))—the “home rule” provision. Typical examples that have evolved in the Home Rule of municipal affairs since its passage in 1879, include the manner of conducting local elections and the city’s dealings with its municipal officers and employees, local taxes and sometimes construction matters including force account work.

The municipal affairs that CIFAC is concerned with is whether the city adopts a fair and open contracting process—follows the PCC, provides full complete plans, advertises for bids, awards projects to the lowest responsible bidder and makes sure the winning contractor performs as bid and meets prevailing wage requirements since all “municipal affairs” would involve tax payer money.

No promises except this—CIFAC always works for the benefit of the California construction industry to make sure those provisions stated above are adhered to.


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Top 10 Reasons Agencies Violate the PCC

Top 10 Reasons Agencies Violate the Public Contract Code

The Construction Industry Force Account Council (CIFAC) is a compliance organization that works to help private construction contractors get their legal, fair share of public work.

To do this, we investigate California public agencies (hundreds of them) and their projects (thousands of them) to ensure compliance with state bidding laws. In the 40-years of our efforts, there are some common assumptions (excuses) from agencies that we have come across that we would like to share.Michelle Tucker, Executive Director

  1. Force Account Labor is free: Agencies who use internal staff to perform construction work have reasoned that because they already have staff on their payroll, that the labor to do the work is at no cost.
  2. Splitting a project into multiple parts equals separate projects: A project may be competitively bid in multiple pieces, but it is the aggregate value that determines the type of bidding required. A project may not be split to avoid exceeding the bid threshold.
  3. Labor costs exclusively determine a project value: The total value of a project includes the cost of equipment, labor, and materials.
  4. Advertising is not required: It is rarely allowed to dispense with advertising and only under special conditions. Most agencies must advertise projects online, in newspapers, trade journals and by posting their bid notices in public places for at least two weeks before the bid due date.
  5. Using Change Orders for any contractual change: A change order may be issued for unforeseen conditions but may not be used for the addition of work that was not in the original project scope.
  6. A contract was not necessary; we’ve worked with this contractor before: Although a sign of trust and respect, handshake deals are not permissible! Public agencies must execute a written agreement to ensure protections for both parties.
  7. Soliciting bids without plans and specifications: This is allowed, but only under certain situations, such as a design-build project or for informally bid projects under the California Uniform Construction Cost Accounting Act. Written plans and specifications ensure you get the project you bid.
  8. Failing to provide documents upon a Public Records Request: Government Code ensures agencies provide public records upon a request and provide a written response within a ten-day period upon receipt of that request.
  9. Awarding a contract without proper due diligence: There are many complexities to a bid that must be reviewed to ensure compliance with the project plans and specifications. You must ensure the contractor is properly licensed, bonded and experienced to perform the work.
  10. Allowing subcontractor substitutions without proper notification to the listed subcontractor in the bid package: Subcontractors listing in a bid happens for a reason; it is a contractual agreement to perform the work. There are allowances for substitutions, but you must follow the proper procedures first before approving any subcontractor changes.

These Top Ten force account violations aren’t the only things we work on, but they usually provide what we call “a good start,” when CIFAC begins investigating complaints.

Let us hear from you if you have any questions about projects in your area so that we can go to work for you.


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2017 CIFAC Year in Review Banner

2017 President’s Message

By Dave A. Thomas, President, CIFAC. -

As CIFAC’s President, I saw 2017 as a year of change, progress and success. Turning work around, building our team and holding the line on force account limits were all goals well realized.Dave A Thomas, President, CIFAC

In the spring, CIFAC moved our headquarters to a more centralized location from Martinez to Fairfield. The new office at Martin Plaza is west of Highway 80 at the Waterman/Travis AFB Parkway exit. Midway between the San Francisco Bay Area and Sacramento, the location gives easy access to our industry partners coming from either direction. We invite you to drop in anytime at 2420 Martin Road, Suite 250, Fairfield, CA 94534.

Halfway through the year, our longtime Executive Director Cathryn Hilliard retired after 20 years of service and our new Executive Director and former Regional Compliance Manager Michelle Tucker quickly stepped into the position.

Beginning July 1, Michelle traveled all over the State meeting with our partners and lining up mutual goals and objectives to advance job creation. She also hired two new Regional Compliance Managers, Justin Bochmann to cover her former Central California territory and Tony Morelli for the Southwestern quarter of the State. There were other notable changes in industry leadership at the end of 2017 as we said goodbye and thanks to Tom Holsman at AGC, Jim Reed at CCC and Mando Esparza at SCDCL.

In 2017, SB 1, the Road Repair and Accountability Act of 2017, together with various regional and local bond measures passed and authorized more than $100 billion in funds for public works; there was a clear directive from our Executive Committee and myself to expand CIFAC services at the local level. The White House Council of Economic Advisors says that for every $1 billion spent, 13,000 jobs are generated. We are working closely with our industry partners at the local level to make sure that the work is bid to the private sector.

CIFAC’s Commitment to our members and supporters:

  • Coordinating on mutual goals that support the industry
  • Supporting their events and activities
  • Getting results in record time

In 2018, there will be big improvements to our Facebook and email pages. Look for your photos as our Regional Compliance Managers (RCMs) are now supporting member activities and posting more photos of events on our cifac.org website, Facebook and via email.

CIFAC’s new computer Investigations Tracking Program is in full use as of 2017 and gives RCMs field access to all the records so they immediately have the data they need to turn work around, as speed is essential at the front end of projects to get them out to bid.

Northern and Southern California investigation highlights include CIFAC’s influencing the City of Carson in Southern California to use proper bidding for a $5.1 million storm drain and storm capture management system. Discrepancies on their website made the process highly questionable.

In Northern California, CIFAC influenced the City of Colma to bid its $10 million Town Hall Renovation Project. The project was awarded to a Carpenter signatory contractor, using signatory subcontractors.

The City of Stockton was influenced to rebid a $600,000 District-wide plumbing contract after improper procedures were used during the initial bid phase and was awarded to an unlicensed contractor.

For years, the City of Ukiah, the only city in the State to be sanctioned twice by the California Uniform Construction Cost Accounting Commission (CUCCAC), has been skirting the law. This time it was the installation of manhole covers throughout the City that were done so improperly that it earned Ukiah a Cal OSHA violation! Executive Director Tucker has been working for more than two years on the details with CIFAC Board member and Ukiah contractor Lee Howard. Howard and Tucker appeared before the City Council to warn them that this could be a third strike. When a jurisdiction gets a third strike, they lose the elevated $45,000 force account limit and it reverts back to $5,000.

For other examples of CIFAC victories, I refer you to the monthly progress reports. If you are not already on the list for these free monthly updates, please send your email address to snicholson@cifac.org.

Our legislative program is key to CIFAC’s successes. Eddie Bernacchi, our Sacramento legislative advocate, helped us deflect another slough of bills who tried to raise the force account levels of public agencies so they could keep much more work in-house. One of the most interesting in the last session was his work with the Golden Gate Bridge, Highway and Transportation District. SB 622 would have raised the limit for all construction projects from $5,000 to $100,000 (other than vessel repair which already had a $100,000 limit). CIFAC opposed the bill and after discussions among CIFAC members, a GGBHT District Board member, the District General Manager, and CIFAC Executive Director, Bernacchi was able to get that provision removed from the bill.

CIFAC staff joined the support team for SB 1, the Road Repair and Accountability Act of 2017. We participated in support rallies put on by Governor Brown in both Northern and Southern California.

SB 591 was signed into law, which successfully closed the loophole some districts were using to circumvent having to advertise and fairly award Lease-leaseback projects.

I am committed to having a full compliment of staff, “boots on the ground,” to make sure that every opportunity for getting work out to our contractors and union members is first and foremost. I feel confident that we will finally have the resources we need in the next year or two to improve business development opportunities, enhance existing CIFAC programs and launch a more aggressive electronic media program. All of this is about jobs for our members now and in the future.

Sincerely,

David Thomas

Download 2017 Annual Report (PDF)


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2017 By The Numbers Banner

2017 By the Numbers – 2018 The Year Ahead

NORTHERN TERRITORY INVESTIGATIONS

2017 Northern Territory Investigations Graph

SOUTHERN TERRITORY INVESTIGATIONS

2017 Southern Territory Investigations Graph
2018 A Year Ahead Banner

New staff promises more energy, fresh perspectives and a revitalized feel to CIFAC. Our focus has never been stronger and with the future addition of two more compliance managers, we will be able to turn more work around for the industry. Paramount to our success is ensuring that CIFAC has enough staff to pursue our mission of monitoring and enforcing the Public Contract Code.Michelle Tucker, Executive Director

Outreach efforts will be increased, with staff attending more meetings and industry related events. Facebook postings and website updates will be more frequent. The use of Constant Contact, an email marketing program will allow us to significantly increase our communications to our industry members, that include news articles, industry alerts, progress reports and other relevant news.

Public funding for projects is at an all-time high, along with unprecedented man-hour projections from our partners. This presents new challenges as we continue to see an influx of public works projects and work feverishly to monitor the awarding agencies for compliance. The passage of the Road Repair Accountability Act or SB1 will bring millions of dollars to agencies for road construction, reconstruction and maintenance projects. CIFAC intends on diligently monitoring these agencies and their projects to ensure compliance with the Public Contract Code.

Along with increased public funding, means more agencies will try to self-perform work or pursue legislation to increase their bid threshold. CIFAC’s Executive Director or Legislative Advocate continuously monitor and analyze new legislation and changing conditions for their effect on industry priorities.

Our contribution to the public works construction industry is significant and we strive to increase those numbers as the year unfolds.


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California Senate Chamber

CIFAC LEGISLATIVE REPORT – 2017 Session Wrap-up

SACRAMENTO – The California Legislature wrapped up the 2017 legislative session on October 15th which was the deadline for Governor Brown to sign or veto legislation.

This year CIFAC championed legislation (AB 1019) to ensure proper funding and staffing for the California Uniform Public Construction Cost Accounting Commission which oversees the California Uniform Public Construction Cost Accounting Act and the public agencies who are subject to it. Unfortunately, despite support for the measure from public agencies and the construction industry, both labor and management, the measure was vetoed by Governor Brown. In his veto message the Governor sited that the State Controller should have the authority to allocate resources to commissions under his office. The veto of AB 1019 was disappointing, we will need to regroup and consult with the State Controller’s Office on next steps to ensure proper staffing of the California Uniform Public Construction Cost Accounting Commission.Eddie Bernacchi, Politico Group

Outside of the veto of AB 1019, CIFAC had another very successful legislative year. The biggest industry win came with the passage of SB 1, securing $5.2 billion annually for state and local transportation infrastructure. The passage of SB 1 positions CIFAC in an important role, to ensure the proper use and contracting out of those new funds.

We also brought home a victory in the area of further limiting the unfair use of lease-leaseback school construction procurement, which should save CIFAC staff time when monitoring and investigating these types of projects.

In addition, and as always, CIFAC took the leading role in defending force account limits.

Enclosed is a list of the key bills CIFAC took positions on in 2017 and the outcome.

LEGISLATION CIFAC SUPPORTED

AB 1019 – California Uniform Public Construction Cost Accounting Act. Commission Funding: Would have guaranteed staffing of the Act’s administrators, the California Uniform Public Construction Cost Accounting Commission, by the State Controller’s Office. This would have ensured that audits of public agencies who are out of compliance with the Act were performed timely.CIFAC Likes icon

Status: Dead – Vetoed by Governor

GOVERNOR'S VETO MESSAGE:

To the Members of the California State Assembly:

I am returning Assembly Bill 1019 without my signature.

This bill requires the State Controller's Office to make staff available to support the California Uniform Construction Cost Accounting Commission.

The need for this bill is unclear. I am confident that the State Controller's Office is more than capable of dedicating the necessary staff to support the Commission and its work without the mandate called for in this bill.

Sincerely,
Edmund G. Brown Jr.

SB 1 - Transportation Funding: In April of 2017, the California State legislature passed and Governor Brown signed into law SB 1, the Road Repair & Accountability Act.

SB 1 will provide approximately $5.2 billion annually for California roads, highways and transit systems. Half the money will be for state transportation and half for local roads. The revenue collection will begin November 2017.

The money will be allocated as follows and totals $52.4 billion: (10-year outlook)

State investment programs (50%)

  • Fix-it-First Highways $15 billion
  • Bridge and Culvert Repair $4 billion
  • Trade Corridor Investments $3 billion
  • Solutions for Congested Commute Corridors $2.5 billion
  • Parks Funding for Ag, Off-Highway Vehicle & Boating $800 million
  • STIP (State Share) $275 million
  • Freeway Service Patrol $250 million
  • California Public Universities Transportation Research $70 million

Local/Regional investment programs (50%)

  • Fix-it-First Local Roads $15 billion
  • Transit Capital and Operations $7.5 billion
  • Local Partnership Funds $2 billion
  • Active Transportation Program Bicycle and Pedestrian Investments $1 billion
  • STIP (Local Share) $825 million
  • Local Planning Grants $250 million

The money will be generated as follows and will total $52.4 billion: (10-year outlook)

  • Fuel Taxes:
  • Gas Excise $24.4 billion
  • Diesel Excise $7.3 billion
  • Diesel Sales $3.5 billion
  • Vehicle-Based Fees:
  • Value-Based Transportation Improvement Fee $16.3 billion
  • Zero Emissions Vehicles (ZEV) Fee Commencing in 2020 $200 million
  • One-Time Repayment of Transportation Loans
  • Repaying Outstanding Loans from the General Fund: $706 million

AB 591 – School Property: Lease: County Boards of Education: Closes a loophole some school districts were using to circumvent recently enacted laws that require that schools using the lease-leaseback project procurement method advertise for bids and establish a competitive selections process for awarding lease-leaseback contracts.

Status: Signed into law

SB 256 – Public Contracts: Criminal Offenses and Statute of Limitations: Would criminalize as misdemeanors certain violations of public contract law dealing with competitive bidding and would allow the commencement of the prosecution of those crimes and other, similar crimes within 3 years from the date of the offense.

Status: Held in Senate Appropriations Committee

SB 634 – Santa Clarita Valley Water Agency: Reorganizes Castaic Lake Water Agency and Newhall County Water District into the Santa Clarita Valley Water Agency and applies the requirements of the Public Contract Code to the new agency.

Status: Signed into law

LEGISLATION CIFAC OPPOSED

AB 636 – Local Streets and Roads: Expenditure Reports: Current law requires each city and county to submit to the Controller a complete report of expenditures for street and road purposes by October 1 of each year relative to the preceding fiscal year ending on June 30. This bill would instead require the report to be submitted to the Controller within 7 months after the close of the fiscal year adopted by a county, city, or city and county.CIFAC Dislikes icon

Status: Held in Senate Rules Committee

AB 1250 – Counties and Cities: Contracts for Services: Establishes specific standards for the use of services contracts by counties and cities. Beginning January 1, 2018, the bill would only allow a county or county agency, or a city or city agency, to contract for services currently or customarily performed by their current employees when specified conditions are met. Among other things, the bill would require the county or city to clearly demonstrate that the proposed contract will result in actual overall costs savings to the county or city and also to show that the contract does not cause the displacement of county or city workers. CIFAC opposed the bill and was able to secure amendments exempting construction, alteration, demolition, installation, repair, or maintenance work from the provisions of the measure.

Status: Held in Senate Appropriations Committee

SB 622 – Transportation District: Contracts: Requires a bridge and highway district to advertise for contracts for all vessel repair, maintenance, and alteration work if the estimated expenditure exceeds $1,000,000, and for all other construction, repair, maintenance, and alteration work, and all similar work, if the estimated expenditure exceeds $5,000, in at least one newspaper and one trade paper of general circulation. CIFAC opposed the bill as originally drafted which would have raised the force account limit on construction, repair and maintenance from $5,000 to $100,000. At our request that provision of the bill was removed.

Status: Signed into law

LEGISLATION CIFAC ACTIVELY MONITORED

AB 618 – Job Order Contracting: Community College Districts: Authorizes community college districts to enter into job order contracts, an alternative construction contracting agreement currently available to school districts, until January 1, 2022.

Status: Signed into law

SB 851 – Local Agency Projects: Extends the sunset date on the authority of counties to use construction manager at-risk contracting, extends construction manager at-risk contracting authority to the City of San Diego, and allows the Santa Clara Valley Water District to use the design-build procurement method.

Status: Signed into law

AB 1424 – University of California: Best Value Construction Contracting Program: Eliminates the sunset on the University of California's authority to use the best value procurement method for construction contracting.

Status: Signed into law


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Public or Private? Labor Code VS PCC Banner

Public or Private? Labor Code VS Public Contract Code on Public Projects

By Michelle Tucker, Executive Director. -

There appears to be much confusion surrounding public project definitions. CIFAC Compliance Managers often hear “the Labor Commissioner made a decision that this is a public project so why didn’t it bid”. The Labor Code (LC) finds that most projects with more than a dollar of public money is classified as a public project with minimal exceptions.Michelle Tucker, Executive Director

The Labor Code, which outlines the requirements for the payment of prevailing wages defines a public project as the “construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds” and includes the design and pre-construction phases of work.

Just because a construction project is funded through public funds does not mean that the Public Contract Code (PCC) applies.

The PCC definition varies depending on the type of agency. There are over 100 different types of agencies listed, including state agencies like Caltrans and local agencies such as cities, counties and school districts. There are some basic factors that indicate a project may be subject to the PCC such as if the public agency is handling the procurement of contractors on a project, whether the funds are public or private, the classification of work involved and the cost value of the work.

Private non-profit organizations, associations or joint powers authorities are not required to follow the Public Contract Code although their funding is commonly public money.

If you have any questions about the applicability of the PCC or are concerned about a project in your area, please contact CIFAC.


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Maintenance or New Construction? The Million Dollar Question

By Jamie Watkins, Southeastern Regional Compliance Manager. -

Here at CIFAC one of the ways Regional Compliance Managers monitor state and local government agencies, is by reviewing city agendas looking for any items that may be out of compliance with the Public Contract Code. I was recently sent notification of a City in my region advertising a Request for Proposal (RFP) for “on call painting services.” The three-year contract was described as maintenance work to preserve city owned facilities. Determining “maintenance” as distinguished from “new construction” is not a black and white decision, but rather a gray area. The Public Contract Code states maintenance work and new construction is:Jamie Watkins, Southeastern Regional Compliance Manager

Maintenance Work (PCC section 22002), maintenance work “is routine, recurring work for preservation or protection of any publicly owned facility. Minor repainting is allowed, as well as the work to maintain publicly owned facilities.” Maintenance is touch up, work for example painting a portion of the building, painting doors, or door frames

New Construction. (PCC section 22002(c)) specifies that new construction “is the renovation, improvements, demolition and repair work involving any publicly owned, or operated facility.” Painting or repainting can be considered new construction based on the scope of the project. New construction for example could be considered painting an entire building.

Although there are many unknown facts about the scope of the project, if the work turns out to be specifically maintenance it is important to know maintenance work does not have a cap and multi-year maintenance contracts are legal. Agencies are not required to bid maintenance work, however we encourage them to do so. If the project turns out to be new work per the definition of new construction, then the project should follow the competitive bidding process.

With this in mind, I will continue to monitor upcoming city agendas for clarification on the project. CIFAC can be a resource for the contractors, as well as cities explaining Public Contract Code requirements, fair bidding, and transparency.


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Sometimes you Don't Know, What you Don't Know

Charter City responds… “We’re doing what’s best,” Really? Sometimes you Don’t Know, What you Don’t Know…

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

During the second week of January, 2018, I noticed that the City of Arcadia was intending to award a $223,939 contract for their Fire Station No. 105 roof restoration project to a Southern California roofing contractor.

Upon additional research, I determined that this was being procured through the U.S. Communities Government Purchasing Alliances Cooperative Purchasing Program or National Joint Powers Agreement (NJPA) with the bidding and awarding process being handled by U.S. Communities. (The use of NJPA’s or Cooperative Agency Purchasing agreements are totally legal per the State of California’s Government Code Sections; 6500 and 6502)Tony Morelli, Southwestern Regional Compliance Manager

Arcadia’s Staff report listed four Southern California roofing contractors who through U.S. Communities JPA, bid on this project with bids ranging from $223,939 to $446,594. Unable to find any local source for the advertising of this project, including the City’s own website, I wondered how or if the advertising and awarding process had even been properly conducted? That started my investigation to acquire more information from the City to verify that the advertising and awarding process was being followed as required.

Sending the City a formal request for information, (knowing that Arcadia is a Charter City and as such can determine their own Charter/Municipal Code policy’s concerning contracting) I asked anyway for information concerning the advertising and awarding process on this project and additionally requested that they please table the awarding of this contract until the City was able to respond to my concerns. The City replied that they would table the awarding of the contract out of an abundance of caution until they could look into CIFAC’s concerns and would get back to me.

Approximately 10 days later, I received the City’s written response: (Summarized)

“The City of Arcadia’s Staff and Attorney have reviewed CIFAC’s concerns and believes CIFAC’s allegations are without merit.

As CIFAC may be aware, the City of Arcadia is a charter city generally subject to its charter, municipal code and other applicable laws. The procurement for the project is to be completed pursuant to the U.S. Communities cooperative procurement program.

In addition to the City’s authority to enter into JPA type cooperative agreements, City staff also diligently reviews and analyzes all proposed procurements, including this one. In this case, City staff also required the vendor to document multiple subcontractor pricing for installers to further verify the competitive pricing and savings to the City.

Based on due diligence completed by City staff, the City has determined that the proposed cooperative purchasing arrangement to be used for the project is the most economical and efficient method for procuring the project materials/services. Accordingly, City staff has also determined that there is no competitive advantage to be gained by further and/or additional competitive bidding of the project in light of these facts. Therefore based on all of the above reasons, the City is satisfied that it may lawfully proceed with the cooperative procurement contemplated for the project.”

End of story? I thought so, but on May 10th, I’m looking at Arcadia’s May 15th City Council Agenda items, when I’m suddenly transported back into the Twilight Zone! Low an behold, I see an agenda item seeking approval from the City Council to award a contract for the City’s Fire Station No.105 Roof restoration project to a different contractor in the amount of $107,553.00. Apparently the City had second thoughts and decided to re-evaluate the costs for this project. The City recently approved and purchased the specified roofing materials to be delivered directly for $74,488 and then put out a notice inviting bids for the installation portion of the project. Four bidders submitted bids, with the project being awarded to a local area contractor for $107,553. Total project cost this time around… $182,021 vs. $223,939. A cost savings to the City and its Citizens of $41,917!

That being said, I can’t help but wonder if my original inquiry helped to plant the seeds of doubt about the actual savings the City believed they were going to gain by utilizing the National JPA Cooperative Purchasing Program? I don’t believe in coincidence, but rather choose to believe that CIFAC’s inquiry ultimately affected a positive outcome for all concerned.

Oh and one final note, I reached out by email to Arcadia’s Public Works Director to thank him for competitively bidding out the contracting portion themselves and congratulate him on the cost savings for this project.  Yep… you guessed it, no reply!


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SB1 Article Banner

SB1 – Rebuild California’s Roads!

By Justin Bochmann, Central Regional Compliance Manager. -

In 2017, California Senate Bill 1 (SB1) was signed into law by Governor Jerry Brown. Also known as the, “Road Repair and Accountability Act”, the bill will raise approximately $52.4 billion over a 10-year period to invest in desperately needed transportation infrastructure repairs. The passage of this bill was a huge win for the construction industry, and Californians in general. Since California has not had a gas tax increase in nearly 25 years, billions of dollars in backlogged repairs have accumulated causing California’s roads and bridges to quite literally fall apart because of it. The funding generated from SB1 will ensure we have safe roads and bridges to drive on and provide thousands of good paying jobs to boot. Many CJustin Bochmann Central Regional Compliance Manager - CIFACalifornia communities are already seeing these dollars put to work in their area, and the growing workforce needed to accomplish this task.

With over 26 million licensed drivers in California, nearly double the next closest state, our roads see more action than anywhere else in the country. In turn, they deteriorate at a faster rate than most. It is estimated that the average driver will spend more than $700 per year on vehicle repairs caused by bad roads and bridges. Neglecting transportation infrastructure also brings forth other safety concerns such as heavy congestion in almost every part of the state. Not only do these nuisances effect each and every one of us, California’s economy as a whole is negatively affected.

The Ripple Effect is a term used in Economics to describe how one action has a spreading effect and influences other areas around it. Sometimes the effects are good and intended, while at other times they are unexpected and unintended. When it comes to keeping SB1, California’s economy will experience the ripple effect in a very positive way. More jobs, safer roads, higher sales and output by businesses, etc. If the repeal effort for SB1 is successful, a ripple effect will still be present but in the opposite direction. Not only will this jeopardize public safety and grow the traffic congestion problem, an estimated 680,000 jobs and more than $182 billion in economic growth will be lost over 10 years if SB1 is repealed. This one change could single handedly effect the entire state’s economy, including many other areas beyond construction. It would be detrimental for the growth of California going forward.

In order to prevent all of the negatives listed above, Californians must show up to vote in June’s Primary election and November’s General election. In June, Proposition 69 will lock in revenue brought in by SB1 and require that it is spent on transportation purposes and not diverted elsewhere. This is vital to the construction industry and important to the fight against the repeal effort expected to be present on the November ballot.

Be sure to vote Yes on 69 in June and Oppose the repeal of SB1 on the November ballot.

More info: https://fixcaroads.com/

https://fixcaroads.com/sb1-economic-impact/


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League of California Cities

League of California Cities Transportation Funding Toolkit

SB 1 Toolkit (Updated: 03/21/18)

The goal of the city and county toolkit is to help you inform and educate your community about projects and associated benefits that are being made possible by SB 1 – the Road Repair and Accountability Act of 2017. The information is most informative/effective when you provide specific details about local projects happening in your city/county.

Additional SB1 Toolkit information here

SB 1: The Road Repair and Accountability Act of 2017

For cities, SB 1 will double the amount of revenues they each receive from the state for their local street maintenance and rehabilitation needs. Annually, $500 to $650 million will go to cities statewide, allocated on a per capita basis. A vast majority of the new revenues for cities will come out of the newly created Road Maintenance and Rehabilitation Account (RMRA) where cities will have to prioritize fixing their existing infrastructure first before having some additional flexibility for those funds for other transportation needs.

Below, is a listing of the estimated revenue generated from of SB 1 and when they go into effect:

  • $1.8 billion – 12 cent increase to gasoline excise tax (Nov. 1, 2017)
  • $730 million – 20 cent increase to diesel excise tax (Nov. 1, 2017)
  • $300 million – 4% addition to diesel sales tax (Nov. 1, 2017)
  • $704 million – One-time loan repayment (2017-2020)
  • $1.6 billion – $25-$175 transportation improvement fee (Jan 1, 2018)
  • $1.1 billion – 17.3 cent reset of price-based gas tax (July 1, 2019)
  • $20 million - $100 zero emission vehicle registration fee (July 1, 2020)

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See Something Say Something Banner

If you See Something, Say Something – It’s Not Just a Cliché

By Patricia (Patti) Rascon Southern Regional Compliance Manager. –

Just like any valuable tradesperson, the Regional Compliance Manager (RCM) team at CIFAC relies on many tools of the trade to empower us to complete our jobs. While we continuously monitor agendas in our respective regions to pinpoint force account violations, we also rely on alerts from our industry partners (boots on the ground), networking contacts, educational events and occasionally, Google Alerts. With that being said nothing beats being at the right place at the right time!Patricia (Patti) Rascon, Southern Regional Compliance Manager

What happens when a Public Works department admits to self-performing paving work at a depth over one inch because… “It’s just easier than bidding it out”? Yes, this actually occurred at an event I was attending! This information can and did set the wheels in motion for a closer look.

Straightforward information in problem solving includes the Five W’s: Who, What, Where, When and Why. In this scenario we know who and why. During the preliminary stages of my investigation, I located the issuance of two purchase orders for “Bulk Street Materials”. In of itself, this is a common practice, but when you factor in the purchase of a new grading tractor, a heavy duty loader and the admission of self-performing work, it definitely warrants an investigation! With a public records request in place, the missing blanks of what, where and when will soon be revealed to me, and will ultimately determine the outcome for this agency.

CIFAC values our industry partners and we strive to maintain integrity with all agencies concerning bidding, force account and the like. If you see something, say something, we are just a phone call or click away at www.cifac.org


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Force Account Limit and Bid Threshold Article Banner

Force Account Limit and Bid Threshold, What’s the Difference?

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

Our members, partners and supporters are frequently asking; “What’s the difference between a public agency’s force account limit and their bid threshold.” The person asking the question tends to be confused because they think they are one and the same.Matthew (Matt) Hilliard, Bay Area Regional Compliance Manager

Here's the difference by definition.

The Force Account limit is the limit of work that a public agency can do with its own forces before they must go out for competitive bids. Force account is the dollar value of labor, materials and equipment at the rate the public agencies charge themselves. Labor cost calculations are based on the entity’s actual cost of labor. Force account limits do not apply to maintenance work.

The Bid Threshold is the dollar amount at which an entity, if they are going to use a contractor, must bid out the work. This is sometimes set by a local ordinance, but is commonly used with Charter Cities. It may, but does not need to be the same as their force account limit.

Here’s where limits and thresholds get a little tricky, but we are available to help.

California State Law (General Law) defined in the California Public Contract Code (PCC) sets the force account limits and bid thresholds for public agencies. They vary by type of agency. For example, a general law city has a force account limit of $5,000, while a county has a $4,000 limit if their population is less than 500,000 and $6,500 if it is above 500,000. All new work over that amount must be formally advertised for competitive bid. School Districts and Special Districts have different force account limits.

Charter Cities can write their own rules but the local voters must approve these rules. They may set force account limits and bidding thresholds at different levels. CIFAC will always encourage Cities to follow general law when it comes to the public contracting section of their Charter.

Then there are public agencies that are signatory to the California Uniform Construction Cost Accounting Act (CUCCAA). They can self-perform the work to $45,000 and use informal bidding up to $175,000, above which they must advertise for formal bidding.

As you have read, the definitions of force account limits and bid thresholds are clearly different and there are a variety of formulas Counties, Cities and Special Districts use. That is why CIFAC exists. We use our expert knowledge of the Public Contract Code to help you with your questions and get you the answers you need.


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What is CUCCAA Banner Image

What is CUCCAA?

The California Uniform Construction Cost Accounting Act, or CUCCAA, is a term that gets thrown around a lot when talking about local public agencies, but what is it?

The Act is legislation enacted in 1983 to help promote “uniformity of the cost accounting standards and bidding procedures on construction work performed or contracted by public entities in the state.” Section 22001. The Act is a voluntary program available to all public entities in the State, but only applies to those public agencies that have “opted in” to the provisions set forth by the Act. The Act can be found in its entirety under Public Contract Code section 22000 et seq.

It allows local agencies to perform work with their force account up to $45,000. It also allows the agencies to informally bid a project up to $175,000. Because local agencies choose to become a signatory to the Act, they can leave the Act whenever they like.

Many participants praise the Act because it gives them more leeway to get public works projects done by speeding up the awards process, improving timelines for project completion, and has eliminated considerable amounts of red tape related to bidding projects. This benefits contractors because it means more public works projects are going out to bid, equating to more work for the construction industry.

There is a commission within the California State Controller’s office that oversees the Act and ensures local agencies are following the provisions outlined in Public Contract Code sections 22000 to 22045. The Commission is made up of seven members from the private sector and seven members in the public sector, and they receive no pay for being a part of the commission.

Should an agency be found out of compliance with CUCCAA, a formal complaint can be filed and the Commission will investigate the complaint and then deliver a verdict on whether the agency was in the wrong.

When an agency is found to be out of compliance, the Commission will issue a “strike” against the agency. If an agency receives three strikes over a 10 year period they are disqualified from the Act and must wait three years before they can file to be part of the Act again.

Overall, the Act gives public agencies that participate benefits as a tradeoff for additional compliance measures. The Commission and the ability to file a complaint against an agency is an additional tool to help bring an agency out of compliance with the Public Contract Code back into compliance.


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When In Doubt Bid It Out - Waterline Extension Spring Valley

When In Doubt, Bid It Out

By Justin Bochmann, Central Regional Compliance Manager. -

Recent CIFAC investigation provides a perfect example of how projects valued close to the force account limit should be bid out.

Overview: In February, CIFAC’s Central Regional Compliance Manager, Justin Bochmann, investigated a waterline extension project taking place in the city of Valley Springs. This particular project was done by a negotiated contract instead of being put out to bid. One of the first things he checked when starting this investigation was the PWC-100 form on the Department of Industrial Relations (DIR) website. This provided a good bit of information on the project, including the awarded contract amount. Through this form, Bochmann learned that this project was only a few hundred dollars shy of the agency’s $45,000 force account limit, giving him reason to request more information from the awarding agency pertaining to actual cost of the project. After obtaining the requested documents, Bochmann was able to conclude that the total project cost had actually gone over the agency’s $45,000 force account limit, which put them in violation of Public Contract Code (PCC) Section 22042 (b): Exceeded the force account limits.

Justin Bochmann Central Regional Compliance Manager - CIFACThe Details: During the course of his investigation, Bochmann identified certain costs associated with the project that were not listed in the original construction contract. These were directly associated with the project, occurred during the time of construction, and were necessary for the completion of it. The agency did not include these costs on the PWC-100 form because they were not done by the actual contractor performing construction of the project, but instead by the engineering firm tasked with designing the project. The agency was unaware that this needed to be included in the total project cost, and it ultimately led to the project going over their force account limit.

The Takeaway: When agencies decide to design and construct a public works project, there are strict dollar limits for the ability to use force account and when informal or formal bidding procedures are required. Because this particular agency adopted the California Uniform Public Construction Cost Accounting Act (CUCCAA), they are provided a $45,000 limit to use their own force for construction or to negotiate a contract. With a lot of construction projects, unforeseen costs arise during the course of construction. Sometimes this comes in the form of additional construction needed to complete the project that was not included in the original scope. Other times, agencies may run into problems with easement or similarly related land use issues. In this case, it was the latter. Because the original construction contract was only a few hundred dollars shy of their limit, it left them with very little wiggle room for additional costs to be incurred. As a general rule of thumb, if the cost estimate of a project is approaching the force account limit, it should be put out to bid. This can prevent any future headaches for the agency and eliminate the possibility of violating the Public Contract Code. Unfortunately for this agency, they learned the hard way and an investigation by CIFAC was able to bring this to light.


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Illusion or Fact Building

ILLUSION or FACT?

By Patricia (Patti) Rascon, Southern Regional Compliance Manager. -

Enacted in 1983, the California Uniform Public Construction Cost Accounting Act (referred to as the ACT) provides public agencies economic benefits and greater freedom to expedite public works projects. Their Policies and Procedures Manual offers a plethora of information, and provides systematic instructions for adoption or discontinuance of the ACT.

Regional Compliance Manger’s regularly refer to the List of Participating Agencies while investigating potential violations of the ACT. Two scenarios come into play; they have opted in or opted out. It is not as simple as “Abracadabra”, the Office of the State Controller must be notified in writing, and in other words, “selective” adherence to the terms of the ACT is a violation.

Patricia (Patti) Rascon, Southern Regional Compliance ManagerAlerted to the City self-performing the building of a pony wall around the perimeter of a basketball court, my initial investigation confirmed the issuance of a RFP and the award of a contract for a new basketball court. The pony wall was not included in the original scope of work. Classified as General Law, their force account limit was $5000. In discussions with the Interim Public Works Director, I asked for all cost accounting documentation relating to the wall (since it was likely they exceeded their limit). Apparently, we were unaware they were signatory, and the conversation segued to becoming as such. Because CIFAC is all about educating agencies, I provided him with the link to the California Uniform Public Construction Cost Accounting Act, and offered my assistance should he need any additional information.

Along with the financial documentation, I received a copy of the resolution approved by the City Council opting into the ACT. What? My initial research confirmed they were not signatory. After contacting the State Controller’s Office, I determined the city neglected to file the paperwork with them, I notified the City Clerk, paperwork was filed and they are compliant.

Things are not always what they seem, and not unlike the Magic show, “sleight-of-hand” can intervene, the devil is in the details.


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Pismo Beach, Bello Street Veterans Building

Following Proper Contracting Procedures Results in Cost Savings Benefit

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

It was recently brought to my attention that the Public Works Director for the City of Pismo Beach would ask the City Council to approve an upcoming agenda item regarding a change order for a grading and paving contractor, in the amount of $137,380.00.

Upon additional research, I discovered that the intended change order was for their Bello Veterans’ Hall Parking Lot Project. This was located on the same street as their Bello Street Paving Project currently underway by a grading and paving contractor per his original contract issued by the city for $124,554.00.  Somewhere along the way, city staff asked the contractor for a quote to also pave, stripe and install wheel stops in their Bello Veteran’s Hall Parking Lot. The contractor provided an additional estimate to do the extra work for $137,380.Anthony (Tony) Morelli, Southwestern Regional Compliance Manager

I reached out to the city to inform them that they really needed to bid-out the Bello Veteran’s Hall Parking Lot Project, since it obviously was a separate project and not a part of the original scope of work issued to the paving contractor. I further advised the city that contract change orders are generally written when their needs to be changes to the original contract, usually brought about by unforeseen circumstances and MUST fall within the original scope of the work.

Read More


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Ukiah Sidewalk Work image

The City of Ukiah Bids Work Listed in Change Order

After a letter from CIFAC, the City of Ukiah decided to bid a $71,000 paving and sidewalk project. This work had previously been listed in a change order, but CIFAC was able to convince the agency to bid the work.

On January 17, CIFAC was contacted about a change order pertaining to the work being done at the Grace Hudson Museum. The person said they were concerned because the paving and sidewalk work listed in the change order was not part of the original scope of work.

CIFAC looked into the matter and agreed. CIFAC wrote the Ukiah City Manager and City Council a letter outlining her concerns and submitted it a few hours ahead of the meeting. The item was pulled from the consent calendar at the January 17 meeting.

On February 2, CIFAC received an email from the Director of Purchasing. She explained that even though the City’s attorney said they were within their right to add the work via a change order, the City would be putting the project out to bid. CIFAC checked the February 7 City Council agenda, and noted the project is listed as an agenda item with the recommendation to put the work out to bid.

CIFAC was very happy with the outcome. “Area contractors now get the opportunity to bid a project not listed in the original scope of work instead of the work being performed via a change order,”.

“I greatly appreciate the City of Ukiah vetting my concerns and making a decision that ultimately benefits the community”.


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ABC’s of Public Works Bidding in California

By Michelle Tucker, Executive Director

One of the most frequent calls we get at the CIFAC office is from a contractor wondering what the requirements are to be able to bid on public works projects. As money's raining down from SB1, the November 2014 Prop.1 water bond and another bond issue on the ballot June 5th, we’re sure we are going to be getting a lot more of these calls.

To help these contractors, we are offering this simplified list of requirements for bidding and performing any construction project in the state that includes taxpayer funding. The fundamental requirement leads to a host of more complicated questions but the basics are the basics everywhere.Michelle Tucker, Executive Director

It all starts with the Public Contract Code, the section of California law that establishes the rules of the road for public works contractors and their customers. Public Contract Code (PCC) applies in one respect or another to virtually all-public entities in California.

Public Contract Code §1100 contains an express declaration of legislative intent, stating that the purpose of the Code is to:

  • To clarify the law with respect to competitive bidding requirements.
  • To ensure full compliance with competitive bidding statutes as a means of protecting the public from misuse of public funds.
  • To provide all qualified bidders with a fair opportunity to enter the bidding process, thereby stimulating competition in a manner conducive to sound fiscal practices.
  • To eliminate favoritism, fraud, and corruption in the awarding of public contracts.

The importance of competitive bidding stems from the California Constitution and more than 140 years of California Supreme Court precedents.

First Things First

Therefore, if you want to bid public works in California, there are, as you might expect a bunch of rules.

The first rule is that you must be a licensed contractor, meeting the requirements of the Contractors State License Board (CSLB). In California, anyone who contracts to perform construction work that is valued at $500 or more in combined labor and materials costs must hold a current, valid license from the CSLB.

Your license will not say “Public Works,” of course but, instead, cover one of the two big categories; General Engineering (A) or Building (B) for general contractors or one of the 40+ specialty trade licenses (C) and the more exotic hazardous materials categories allowing you to perform work as a subcontractor in your specialty.

We hear you now saying “I’ve already got a license, so I’m good to go!” but the question is, do you have the correct license, as specified in the Request For Proposals (RFP) issued by the agency for whom you want to work. In either case, your work starts at the licensing website www.cslb.ca.gov and for more specialized information visit http://www.cslb.ca.gov/About_Us/Library/Licensing_Classifications/.

CSLB is more than a licensing agency, they are also an enforcement agency and here are the two big areas where CSLB is concerned with public works.

  • Bids that don’t include all work needed
  • Failure of contractors to complete work in a timely fashion

First, it is imperative that contractors provide awarding agencies bids that reflect the entire known work at the time of the bid. It is not appropriate for a contractor to low-ball a bid to get a job, and then try to increase the contract amount later with change orders. Disciplinary action has been taken in this area.

Second, CSLB is seeing an increasing number of public works jobs that are not being finished on time. Business &Professions Code §7119 requires that a contractor show due diligence in completing contracted work. Not doing so also gives CSLB a cause to take disciplinary action against a license.

No Rest for the Weary

After acquiring the proper license, your next step will be registration as a Public Works Contractor with the state Department of Industrial Relations (DIR) for any work performed that costs at least $15,000.

That means your next stop is at https://www.dir.ca.gov/public-works/contractors.html where the state labor agency runs you through the gauntlet of registration, paying a $400 fee for the privilege and learning the mandatory steps you must meet after you’ve registered.

The simple list is pay prevailing wages, follow apprenticeship requirements, maintain, and submit certified payroll records, but none of these requirements are simple. If you are signatory with any of the basic construction trade unions this will be familiar ground, but make sure you are following the DIR guidance.

The Homeboys

Finally, the work is performed for a local agency/government/special district and the rules vary from town to school board to publically owned utility, etc., so the “Know Thy Customer” requirement for every business applies.

There have been many lawsuits filed over the years to determine what “public funds” means, but in essence, it is any job that has a cent of tax money in the funding, from a parking lot of a movie theater in the Mohave Desert to the massive bridge replacement in the Long Beach harbor; all are “publically funded.

If you have completed all the necessary CSLB and DIR steps, you still face challenges at the local level, starting with “prequalification.” All large public agencies and many smaller ones have prequalification requirements for their work. It has been in the PCC since 1999 for agency work and school districts.

Over the years, these criteria have morphed into a tangled web of differing standards so it is the contractor’s job to make sure they understand the local requirements in each jurisdiction.

This is an area where CIFAC does a lot of work, making sure that cities and other agencies follow the law. One area of major concern is in the actions of charter cities that often try to subvert the spirit if not the letter of the code.

Friends in the Business

Our final word of advice for contractors interested in bidding public works is that they join a trade association in their area, one of the many specialty groups that gather like-oriented contractors (plumbers, electricians, etc.) or one of the larger, broader groups that represent contractors across a broad array of interests.

Trade associations are more than a social club. Many are your representatives in union negotiations. Many will stand in your place regarding disagreements about the bidding and other practices of public works agencies. All of them concentrate the political power of your industry in Sacramento, county courthouses and city halls around the state to deliver collective efforts to improve the lot of contractors. Most of them provide educational programs about changes in laws and regulations that affect your business and share that information through their communications programs.

CIFAC works with many of the trade associations to help their members with these issues. If you are not a member, you should be. Become a member today.


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Paving the Way with ADEA image

Paving the Way with ADEA

By Patricia Rascon, Southwestern Regional Compliance Manager

What is ADEA and how does it potentially benefit our construction industry? ADEA is the acronym for the Age Discrimination in Employment Act of 1967. By crushing the stereotypes that prevent companies from recognizing the variety of strengths they currently have, such as wisdom, experience and reliability, older workers can be part of the solution to ease the skilled worker shortage the construction industry.

Fifty years ago, with the enactment of ADEA, it-opened opportunities for older workers by disallowing most age limits and the requirement of equal treatment of workers without regard to age. Victoria A. Lipnic, Acting Chair for the U.S. Equal Employment Opportunity Commission wrote, “The ADEA is based on the principal that ability matters-not age. No one should be denied a job or should lose a job based on the assumptions of stereotypes. Age is just a number. It doesn’t define one’s ability, potential or value. That is the purpose and promise of the ADEA.”Patricia (Patti) Rascon, Southern Regional Compliance Manager

Fast forward to November 2016, and in the publication of Engineering News-Record (ENR), there was a call-to-action for more mentoring in the construction industry. The caption, “Eat lunch where you don’t belong”, suggested that one should immerse him or her self into the company with something as simple as eating lunch with their colleagues, talking shop with them and learning about what they do. With the workforce still comprised of older workers, companies and apprentices alike can take advantage of the mentor/mentee relationship opportunities.

As a twenty-year member with the National Association of Women in Construction (NAWIC), I have benefited from many opportunities to tap into the experiences of those who came before me. I have not only gained more knowledge about the construction industry, I continue to make life long friends who continue to share their knowledge with me. Mentoring comes in many forms, and the benefits are many. Building relationships are key and I believe we should pay it forward. I challenge you to reflect on how you started your career, your successes and failures and think about how YOU can reinvest and pave the way for someone else.

Winston Churchill once said, “We make a living by what we get, but we make a life by what we give.”


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Five Things You Need To Know About Emergency Declarations

Over the past several months, California has received a lot of rain. In many areas of the state, the record rainfall and snow pack totals are enough to lift them out of drought status.

At the same time, many areas in Northern California also saw a slew of emergency declarations pass by county and city governments in regards to damage caused by storms over the course of several weeks. One of the most notable emergency declarations to pass was the one at Oroville Dam, which led to the evacuation of people in three different counties, as officials feared a catastrophic failure of the emergency spillway.

Fortunately, California has survived this tumultuous storm season. Now that spring is officially upon us, many of the emergency declaration projects are underway. Here are five things you need to know about Pubic Contract Code Section 22050, Emergency Contracting Procedures:

  1. In the case of an emergency, a public agency may repair or replace a public facility, take any directly related and immediate action required by the emergency, and procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids as long as the declaration is passed by a four-fifths vote of the governing body.
  2. Before a governing body declares an emergency, they have to explain their findings based on substantial evidence that the situation will not allow the agency to competitively bid the project, and that the action is necessary to respond to the emergency.
  3. The governing body can also appoint an official, such as a chief administrative officer, city manager, public works director, etc., to declare emergencies so long as the governing body has passed an ordinance giving the person the power to do so.
  4. Should the official declare the emergency, they have to bring the evidence to the governing board at its next meeting on why the project constitutes an emergency. The governing board also has to take action to pass the declaration by a four-fifths vote.
  5. If the governing body, or the person with authority, orders any action on the emergency project, the governing body has to review the emergency action at its next regularly scheduled meeting and at every regularly scheduled meeting thereafter, to continue the action or to terminate the declaration.

Occasionally, agencies try to sneak in additional work that has nothing to do with the actual emergency in order to avoid competitively bidding the work per the Pubic Contract Code. Should you ever have a question about emergency declarations, or a concern about a specific emergency declaration, please contact the CIFAC compliance manager in your area.


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Water Dripping City of Stockton Story

The Importance of Contractor Licensing Laws

By Michelle Tucker, Executive Director

Anyone who works within the public works construction industry knows the importance of the contractor licensing laws in California. Our State has some of the strictest rules in the nation, sometimes causing confusion and headaches while navigating through the bid and award process.

Although the annoyance factor is understandable, did you know that these laws might also be used to your advantage in certain circumstances.

Before we delve into how they may be used, let me quickly summarize the reasons behind them. Per State law, anyone in California who contracts to perform work on a project that is valued at $500 or more, including labor and material, must hold a current, valid license from the Contractors State License Board (CSLB). The CSLB provides licensure in contractor classifications (A) General Engineering Contractors, (B) General Building Contractors and (C) Specialty Contractors. The purpose of the law is to protect the public from incompetence, negligence and dishonesty in those who provide construction services and to safeguard the public against unskilled workmanship and deception.Michelle Tucker, Executive Director

The Contractor's State License Board is the state agency responsible for administering these license laws, which include reviewing and investigating complaints made against contractors and administering disciplinary action against contractors found to have violated any aspect of the licensing provisions.

With this knowledge, let us move on. Agencies are responsible for specifying the classification of contractor’s license required to perform work on a specific public project in their bid solicitations and ensure only appropriately licensed contractors are awarded the construction contract.

In recent cases, I’ve seen agencies request an incorrect classification and award contracts to improperly licensed firms.

For example, I was contacted regarding a $600,000 plumbing contract requiring a C-36 licensure but awarded to a contractor with an A license only. I was asked if the A licensure can perform the work and what ramifications if any, would apply. The agency required a C-36 license in the bid documents. Several C-36 licensures submitted bids, along with one A licensure. The agency awarded the contract to the A licensure and work commenced.Plumber Plumbing City of Stockton Story

It is important to note that the scope of work required no engineering or specialty work that typically would be performed by an A licensed contractor. The contractor was working outside of their classification, which subjected them to penalties imposed by the Contractors State License Board. The agency failed to do due diligence during the review of bids, as the licensing error should have been caught with the contractor being deemed non-responsive. In this case, I met with the agency staff to report the violation and request that all work stop immediately, with the project going to a rebid.

Among the obvious, I explained that the A licensure was afforded a bidder’s advantage as no other A licensed contractor was allowed to bid the work. A level playing field is crucial in our industry. If you are a contractor, I am sure this scenario would anger you if your work were taken away by another contractor who cannot legally perform it. If you are an agency, you want to ensure that the contracting party has the knowledge, experience and expertise to perform your project correctly.

I hope that you can now put two and two together. For contractors and industry agents, when reviewing bid results, make sure you check the license classifications of the low bid contractors who submitted bids and the subcontractors listed for each portion of work. If you see a discrepancy in the licensing of other bidders, you should bring that to the attention of the agency and the CSLB. It may benefit you if your firm is awarded the contract!City Of Stockton Logo City of Stockton Story

If you are wondering what the outcome was with the agency that awarded the contract to the A contractor; they agreed to stop the work and rebid the contract. The contractor was reported to the CSLB, who is currently reviewing the case. The end result is that $600,000 worth of work will be available for appropriately licensed contractors!


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Bridging the Gap Without the App

By Patricia Rascon, Southwestern Regional Compliance Manager

For the first time in history our workforce is comprised of five different generations. The three main groups are Baby Boomers born 1946-1964, Generation X born 1965-1980, and Generation Y born between 1981-1995. Add in some of the Traditional generation born before 1945 and the now emerging Linkster’s born after 1995, and the question arises… how do we merge the generations in the workplace and create a cohesive team environment?

Recently this topic came up while talking with “Steve”, a forty-five-year member of our industry. I was telling him about CIFAC’s new Contract Compliance software that gives us Compliance Managers the ability to create and track our investigations, upload photos, write letters and reports. Essentially, we can work from anywhere! He then reminisced about rotary phones, electric typewriters; carbon paper and Xerox reproduction machines the size of a double deep freezer! Tenured employees were of the culture that communication was done through regular meetings, letters, formal memos, and phone calls. In summary, he said, “Boomers had to learn things the hard way. In addition, they had to memorize what they learned. Generation X, Y rely on the internet to get information. However, the internet has just information; it does not tell you how to communicate. Communication is rational”. Fast forward to cellphones, computers, tablets, and the like, that provide us with the ability to take our office on location rather than shuttling between the two.Patricia (Patti) Rascon, Southern Regional Compliance Manager

While merging technology with tradition and experience, we can bridge the gap and complement each generation by striving to create a diverse team. Utilizing the strengths of all can build strong relationships. In their book Generations, Inc. Meagan and Larry Johnson write about a common practice among Japanese companies where they pair a seasoned mentor “Sempai” with a younger mentee “Kohai”. In addition to the Sempai’s managerial duties, his/her job is to help the Kohai succeed in all areas to include technical and operational questions and organizational politics. The book reminds us to capture Boomers knowledge so all is not lost when retirement calls. On the other end of the spectrum, Generation Y appears to seek balance, not necessarily a nine-to-five workday, but setting their own hours. They understand technology is rapidly changing and they are very interested in continual skill development. They want to contribute right away and stability comes from the ability to balance work and life goals, opportunities for learning and belief that they are supporting company goals.

The one size fits all approach doesn’t work, to manage effectively means we must adjust and be flexible. To sum it up… “Life is rather like a tin of sardines-we’re all of us looking for the key”
-Alan Bennett, British author, actor, humorist, and playwright


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The Brown Act – Impacts Two Cities

By Patricia Rascon, Southwestern Regional Compliance Manager

CIFAC Educates Two Cities on Agenda Posting Requirements

(January 2017) What is transparency? Ballotpedia refers to it as, “Openness, accountability, and honesty define government transparency. In a free society, transparency is government’s obligation to share information with citizens. It is at the heart of how citizens hold their public officials accountable. Governments exist to serve the people. Information on how officials conduct the public business and spend taxpayers’ money must be readily available and easily understood. This transparency allows good and just governance”.

Recently while reviewing City Council agendas for two cities in Kern County, I discovered that they were neglecting to post the agendas on their City Internet websites. Through my research, it appeared that the “sites” were marginally operational with postings of employment openings, calendar of events and public hearings for example, but the agendas were nonexistent.Patricia (Patti) Rascon, Southern Regional Compliance Manager

The Ralph M. Brown Act found in California Government Code §54944.2 (a) (1), focuses on the required agenda postings of at least 72 hours before the regular meeting in a location that is “freely accessible to members of the public”. While the courts have not conclusively defined the term “freely accessible”, the California Attorney General has interpreted the provision to require posting in a location accessible to the public 24 hours a day for a 72-hour period. Additionally, the agenda is to be posted to the City Internet website if they have one.

Are there consequences if the City does not abide by the provision of the code with respects to posting on the Internet site? I was surprised to learn that the answer could potentially be “yes”. The Brown Act cites that there should be “substantial compliance” with all agenda posting requirements which includes posting to the agency website §54960 (d) (1). Technical difficulties in of themselves do not automatically require cancellation of the meeting providing the “agency” is complying with all the other requirements of The Brown Act.

The outcome of my inquiry and subsequent education on The Brown Act requirements resulted in the posting of the current agenda and assurance that they are working to correct the technical issues with their respective sites. All cities have a duty to provide its citizens and the general public with an Internet site that is not only accessible with up-to-date content, but other benefits such as digital amenities to request services, contact staff and make comments, and be a resource in general. Furthermore, and most importantly to have a plan to correct outages and errors quickly.


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Lease Leaseback: This Foe May Be A New Friend

By Michelle Tucker, Executive Director

A new law brings fairness to “lease leaseback” contracting. For many compliance agents and contractors in California, the mere mention of a “lease leaseback” school construction project spurred verbal groans and eyeball rolls. The negative perception surrounding this contracting method was in large part due to school districts abusing its use to circumvent the Public Contract Code competitive bidding statutes via a California Education Code exemption.

For more than sixty years, districts were allowed to lease school property to a developer for a dollar annually and allow the developer to construct and modernize facilities, which the school would regain ownership upon completion. This may not sound like a bad deal initially, until you find out that there was no advertising of the project, no transparency, no price competition, no subcontractor protections………. Need I go on? For the few contractors getting these jobs, that may not be a problem. But in the big picture it means most contractors were left in the dark about the upcoming projects. Not to mention the fact that our economy is based on free enterprise and competition. The whole basis of the Public Contract Code is to ensure a level playing field for contractors, stimulate price competition through bidding, require transparency that prevents favoritism, fraud or corruption in the awarding of contracts and as a protection to the public against misuse of public funds.Michelle Tucker, Executive Director

Let’s fast forward to Jan. 1, 2017. CIFAC partners carried assembly bill 2316, with collaboration from Michelle Tucker, CIFAC’s Central Regional Compliance Manager, which amended the Education Code to now require a competitive solicitation process should a district choose to use this contracting method. This process now includes the adoption and publishing of required procedures and guidelines by the school district, the advertisement of a Request for Proposal, prequalification of contractors, proposals to be submitted in a sealed envelope, with each proposal scored based on a best value system, and finally, subcontractor protections must be built into the contract.

This is a true win-win situation for the Industry and the public. This legislation created an improved method of procurement that is both fair and impartial. CIFAC and partners are committed to holding agencies accountable for their actions and working to increase job opportunities for the Industry.


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Do California Fairs Follow Public Contract Code?

California’s fairs can be difficult navigate. What are the force account limits? Do all the fairs have to follow the same rules? What’s the difference between a state owned fair and a county owned fair? Many of the answers are cut and dry, while some are in a grey area.

In 2012, California’s budget shortfalls meant fairs didn’t receive any public funds to maintain facilities, build new facilities, or run day-to-day operations. This decision came on the heels of a 2009 decision to take the money fairs received from horse racing license fees, and put the money in the general fund. In 2016, all that changed. California began giving the fair districts money again, but many new CEOs are unaware they have to follow the public contract code.

There are 77 fairs overseen by the California Department of Agriculture’s Fair and Expositions Division. Amongst those 77 fairs are 54 District Agricultural Associations that are part of the state of California’s fair network. The other fairs are considered county owned.

A county with a fair that is a District Agricultural Association has a force account limit of $25,000. Once a project exceeds that limit, it must be put out to bid. From there, everything follows public contract code.

For county owned fairs, things are different. They still have to follow public contract code, but it depends on the organization that the county has contracted to run the fairgrounds for them. Many of these county owned fairs use a non-profit fair association to handle the day to day operations and any construction projects. If the non-profit runs everything, then it doesn’t matter if they received public funds because the non-profits are exempted from following public contract code.

The county could have language in the agreement with the fair board on when a project needs to be sent out to bid, but it becomes difficult to enforce certain areas of the public contract code when it’s a non-profit agency. As always, if you feel any agency isn’t in compliance with public contract code, feel free to reach out to a compliance manager with CIFAC.