Author Archives: CIFAC Staff

  • 0
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.


  • 0

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.


  • 0
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!


  • 0
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/


  • 0
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)

  • 0
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


  • 1
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.


  • 0
What is CUCCAA Banner Image

What is CUCCAA?

By Maghan Hunt, Northern Regional Compliance Manager. -

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.Maghan Hunt, Northern Regional Compliance Manager

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.


  • 0
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.


  • 0
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.