Category Archives: Around The State News

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Illusion or Fact Building


Category:Around The State News
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

Category:Around The State News
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.

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Ukiah Sidewalk Work image

The City of Ukiah Bids Work Listed in Change Order

Category:Around The State News

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

Category:Around The State News
By Michelle Pickens, 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.

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 and for more specialized information visit

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 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

Category:Around The State News
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

Category:Around The State News

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

Category:Around The State News
By Michelle Pickens, 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.

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.

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!

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

Category:Around The State News
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

Category:Around The State News
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

Category:Around The State News
By Michelle Pickens, 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.

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?

Category:Around The State News

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.