Senate Bill 258 is currently making its rounds at the State Capitol. This Bill mandates school districts to use the prequalification process for public works projects costing more than $1 million - essentially eliminating the Lease-Leaseback model for such applicable projects. Senate Bill 258's author explains that, "with the economic downturn, school districts are receiving bids from contractors who have never worked on a public works project, are unfamiliar with the additional rules and regulations relating to public works projects, and have never bid on projects" - thereby adding to the risk that the contractor will not complete the project and eventually will cost the school district and the taxpayer. This Bill seeks to mitigate against these kinds of risks.
This Bill is supported by several contractor associations -- and opposed by various school organizations and school districts, including Association for California School Administrators, Association of California Construction Managers, California Association of School Business Officials, California's Coalition for Adequate School Housing, and Fresno Unified School District.
The current draft of the Bill was last amended on June 10, 2010 and the next hearing is scheduled for August 4, 2010.
Stay tuned for updates on this Bill and how the final draft of the Bill could affect your next school project!
By Karina Terakura
Update for SB 258 - mandating prequalification of bidders for school construction projects...
ReplyDeleteThere has been a lot of buzz surrounding the revisions to Senate Bill 258. As mentioned in my last blog - this Bill mandates that school districts use the prequalification process for bidders for school construction projects. Upon first glance, this may seem to suggest that the lease-leaseback model is eliminated as an option for school districts. However, the author of the Bill explained that the current draft of the bill does not "specifically prohibit" the use of the lease-leaseback project delivery method.
Ironically, if this Bill passes in its current form, more school districts may opt to use the lease-leaseback model in order to avoid the costs of the prequalification process as set out in Senate Bill 258!