MEETING SOLE SOURCE REQUIREMENTS UNDER PROPOSITION 39 SOLE SOURCE PROCESS UNCERTAINTIES
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1 MEETING SOLE SOURCE REQUIREMENTS UNDER PROPOSITION 39 Maiya Yang Legal Counsel Jeff Becker Director of Facilities & Operations Fresno County Office of Education 1111 Van Ness Ave. Fresno, CA (559) SOLE SOURCE PROCESS UNCERTAINTIES Does the sole source process prohibition apply to contracts not involving the construction and implementation of Prop. 39 funded projects, e.g., professional services contracts? What competitive process is sufficient to comply with the no sole source process prohibition? Which agency will determine whether a LEA violated the no sole source process prohibition? What are the consequences for a LEA that violates the no sole source process prohibition? 2 1
2 PROP. 39 STATUTES... LEA shall not use a sole source process to award funds pursuant to this chapter. (Pub. Res. Code (c))... LEA may use the best value criteria... to award funds pursuant to this chapter. (Pub. Res. Code (c)) Best Value: Value determined by objective criteria related to price, features, functions, and life cycle costs. (Pub. Contr. Code 20133(c)(1)) 3 PROP. 39 STATUTES All projects shall require contracts that identify the project specifications, cost, and projected energy savings. (Pub. Res. Code 26206(d)) The Proposition 39 Guidelines shall address [c]ontractor qualifications, licensing, and certifications appropriate for the work to be performed.... (Pub. Res. Code (c)) 4 2
3 PROP. 39 GUIDELINES The guidelines defer to the [1] LEA s own procurement regulations and procedures, as long as they reflect [2] applicable state and local laws and regulations and are not in conflict with the [3] minimum legal standards specified above. (Guidelines, p.32) 5 ELIGIBLE PROJECTS Energy efficiency retrofits Clean energy installations Related improvements and repairs that contribute to reduce operating costs and improved health and safety conditions Additional criteria for leased facilities (Pub. Res. Code 26205(a)(1)); Guidelines, pp. 5-6) 6 3
4 ELIGIBLE EXPENDITURES Include costs associated with technical assistance and reducing costs and delays (Pub. Res. Code 26206(i)) Energy planning activities Energy audits and energy surveys/assessments Proposition 39 program assistance Hiring or retaining an energy manager(s) Energy-related training (Guidelines, pp. 9-11) 7 LEA PROCUREMENT REGULATIONS/PROCEDURES Board/superintendent policies Administrative regulations Internal procedures 8 4
5 CONTRACT AND PROCUREMENT State Laws/ LEA Regulations and Procedures Prop. 39 Requirements 9 ANTICIPATED SERVICES/PROCUREMENT 1. Consultant - Advise LEA Compliance with Prop. 39 requirements Selection and implementation of energy projects Training Post-project operation and maintenance 2. Program Assistance Submit utility billings (Step 1) Benchmark (Step 2) Submit energy expenditure plans (Step 7) Calculate job creation benefits (Step 7) Submit reports (Step 8) 10 5
6 ANTICIPATED SERVICES/PROCUREMENT 3. Audit and Energy Surveys (Step 5) Savings calculators American Society of Heating and Air-Conditioning Engineers (ASHRAE) Level 2 audit Data analytics 4. Identify energy projects (Steps 3-6) Savings-to-investment ratio (SIR) calculations (Step 6) Project bundling 5. Provide energy manager services Evaluate and monitor current energy usage Identify opportunities in existing facilities Manage project implementation 11 ANTICIPATED SERVICES/PROCUREMENT 6. Advise and assist LEA to solicit, review, and select contractors to implement energy projects 7. Construct/install energy projects 8. Manage construction/installation of energy projects 9. Train classified employees, other employees, and students relating to energy 10. Operate and maintain energy projects 12 6
7 State Laws PROFESSIONAL SERVICES OR ADVICE Basic Rule: No competitive bidding (Pub. Contr. Code 20111(c)) Design Professional: Competitive selection (Govt. Code 4526) Best Practice: Competitive selection Prop. 39: Competitive selection if services will be paid with Prop. 39 funds 13 CONSTRUCTION SERVICES State Laws Basic Rule: Competitive bidding on contracts for public project involving expenditure of $15,000 or more unless excepted/exempted (Pub. Contr. Code 20111(b)) Lease Leaseback: Competitive selection not required but recommended (Educ. Code 17406) Energy Services Contract: Competitive selection not required but recommended (Govt. Code et seq.) Prop. 39: Competitive selection if services will be paid with Prop. 39 funds 14 7
8 CONSTRUCTION SERVICES Exemptions/Exceptions From Competitive Bidding Below bid limit (Pub. Contr. Code 20111(b) and 20116) Emergency (Pub. Contr. Code 1102 and 20113) Sole source/unavailing (See, Graydon v. Pasadena Redevelopment Agency (1980) 104 Cal.App.3d 631) Day labor or force account (Pub. Contr. Code 20114) Uniform Public Construction Cost Accounting Act (Pub. Contr. Code et seq.) Prop. 39: Exemptions/exceptions likely not applicable to excuse competitive selection 15 GOODS AND NON-CONSTRUCTION SERVICES State Laws: Competitive bidding on contracts involving expenditure of more than $84,100 (2014, adjusted annually) unless excepted/exempted (Pub. Contr. Code 20111(a)) Prop. 39: Competitive selection if services and/or goods will be paid with Prop. 39 funds 16 8
9 RFP/RFQ - PURPOSE Comply with Prop. 39 requirements Retain qualified vendor at lower pricing Articulate LEA s objectives and needs Establish standard format and requirements to evaluate proposals Create procedures to evaluate qualifications Provide transparency and accountability 17 RFP/RFQ PROCESS Prepare RFP/RFQ packet Issue RFP/RFQ Prequalification? Conduct pre-submittal conference Respond to questions Receive responses Handle withdrawal requests Evaluate responses Conduct interviews Reject bids/award contract 18 9
10 CONTRACT ITEMS TO CONSIDER Term: Duration of Prop. 39 funding and implementation or shorter (final project reporting June 30, 2021) Termination: insufficient or non-appropriation of funding Scope of Services Qualify as eligible project/expenditure Comply with energy expenditure plan Coordinate with submission/reporting requirements Amend to reflect funding allocation and change in energy expenditure plan LEA review and approval of projects 19 CONTRACT ITEMS TO CONSIDER Compensation Qualify as eligible expenditure Not-to-exceed cap based on estimated funding allocation Payment schedule consistent with funding allocation schedule Work Product: LEA owns and has rights thereto Compliance with requirements of Prop. 39 and involved agencies Records: Maintenance and availablity for inspection by LEA and other agencies 20 10
11 ADDITIONAL PRACTICAL TIPS Form a Team District staff CBO/facilities director Consultant/energy audit company Legal counsel Architect Formulate a Plan Funding sources Proposition 39/others Proposition 39 submittal and compliance Pre-construction Construction Post-construction Training Implement the plan Prepare and maintain good records 21 11
The views and opinions expressed in this presentation are those of the authors and do not necessarily reflect those of CASBO.
EVERYTHING YOU ALWAYS WANTED TO ASK YOUR ATTORNEY: PROPOSITION 39 P R E SENTED B Y: LISA R. A LLRED, P A R TNER; W. BRYCE C HASTAIN, P A R TNER; A N D THEODORE LIEU, A SSOCIATE The views and opinions expressed
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