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AB-262 Public contracts: lowest responsible bidder: eligible materials.(2017-2018)

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Date Published: 03/28/2017 04:00 AM
AB262:v98#DOCUMENT

Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 262


Introduced by Assembly Members Bonta and Eggman
(Coauthors: Assembly Members Chiu and Steinorth)

January 31, 2017


An act to add Sections 10130, 10170, 10503.5, 10504.10, 10727, and 10768 to the Public Contract Code, relating to public contracts.


LEGISLATIVE COUNSEL'S DIGEST


AB 262, as amended, Bonta. Public contracts: lowest responsive responsible bidder: eligible materials.
The State Contract Act governs the bidding and award of public works contracts by specific state departments and requires an awarding department, before entering into any contract for a project, to prepare full, complete, and accurate plans and specifications and estimates of cost. The act generally requires that an awarding department that proposes to contract a public work to award that contract pursuant to a competitive bidding process, under which bids are awarded to the lowest responsible bidder, with specified alternative bidding procedures authorized in certain cases.
Other existing law establishes specific requirements for competitive bidding for building and improvement projects by the Regents of the University of California, including generally requiring the regents to award contracts to the lowest responsible bidder.
The California State University Contract Law governs contracting for building and improvement projects by the California State University and imposes specific competitive bidding requirements for the Trustees of the California State University, including the trustees to award a contract to the lowest responsible bidder.
This bill would require an awarding department to require a prospective bidder to complete a standard form that states the cumulative amount of specified greenhouse gas emissions that were produced in the material extraction and processing, transport to the manufacturing site, and the manufacturing of eligible materials, as defined, to be used on the project, and would provide that a prospective bidder may satisfy this standard by attaching to that form an Environmental Product Declaration, developed in accordance with standards established by the International Organization of Standardization, or other similar life-cycle assessment method as provided, for that type of product. The bill would require an awarding department, when calculating the lowest responsible bidder for purposes of public works contracts that use eligible materials, to adjust that portion of the bid on the base contract that represents the cost of the eligible materials to incorporate the value of the social cost of those materials. department to use a method developed by the Department of General Services to take into account, during project bid review and award, greenhouse gas emissions of eligible materials to be used in a project, with the intent of reducing greenhouse gas emissions along the supply chain. The bill would require the Secretary of Government Operations to establish a formula to calculate the social cost of eligible materials, in accordance with requirements set out in the bill. the Department of General Services to publish in the State Contracting Manual a method to allow an awarding department to take into account, during project bid review and award, greenhouse gas emissions of eligible materials, in accordance with certain requirements set out in the bill. The bill would authorize a contractor who is awarded a bid under these provisions to use a material supplier that was not reported in the winning bid if that supplier uses eligible materials that have the same or lower emissions than what was reported in the original bid. The bill would provide that if the supplier that was reported in a bid that was awarded under these provisions is unable to perform, the contractor who was awarded that bid shall make a good-faith effort to use a supplier that has the same or lower emissions than the original supplier reported and for a similar cost.
This bill would also require an awarding department to, on or before January 1, 2019, and annually thereafter, prepare and submit to the Legislature and the Governor a report on contracts that were awarded.
The bill would impose similar requirements on the Regents of the University of California and the Trustees of the California State University.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 This act shall be known, and may be cited, as the Buy Clean California Act.

SECTION 1.SEC. 2.

 The Legislature finds and declares all the following:
(a) Climate change will have devastating global impacts.
(b) All scientific evidence points to the need for California and the world to reduce greenhouse gas emissions to avert the worst effects of climate change. Climate change impacts are already apparent in California, where scientists have determined that annual temperature increases and a long-term drought are consequences of human-induced climate change.
(c) The Legislature has committed to reduce greenhouse gases, through numerous statutes requiring regulatory and other action by public agencies. Those regulations and actions do not currently encourage public dollars for infrastructure projects to be spent in a way that is consistent with the state’s goals to reduce greenhouse gas emissions.
(d) Executive Order B-30-15 issued by Governor Edmund G. Brown, Jr. stipulates that “State agencies shall take climate change into account in their planning and investment decisions and employ full life-cycle cost accounting to evaluate and compare infrastructure investments and alternatives.” Full life-cycle cost accounting in this instance also refers to accounting for the impacts across the life-cycle of a product, or life cycle analysis. assessment.
(e) Great quantities of emissions are released during the manufacture and transport of products used in public infrastructure projects.
(f) California, through its extensive purchasing power, can improve environmental outcomes and accelerate necessary greenhouse gas reductions to protect public health, the environment, and conserve a livable climate by incorporating emissions information from throughout the supply chain and product life cycle into procurement decisions, and using that information to help direct expenditure.
(g) Incorporating emissions information will acknowledge those companies that have invested in emissions reduction technologies and practices. It will encourage other companies to take action to reduce emissions to become more competitive in the California bidding process.

SEC. 2.SEC. 3.

 Section 10130 is added to the Public Contract Code, to read:

10130.
 (a) Notwithstanding subdivision (c) of Section 10126, in awarding contracts described in Section 10170, the department shall calculate the lowest bid by adjusting that portion of the bid on the base contract that represents the cost of the eligible materials listed in subdivision (b) of Section 10170 to incorporate the value of social cost of those materials. The department shall calculate the social cost by using the formula developed by the Secretary of Government Operations pursuant to subdivision (b). use the method determined in subdivision (b) of this section to take into account greenhouse gas emissions of eligible materials covered in subdivision (b) of Section 10170, with the intent of reducing greenhouse gas emissions along the supply chain of projects.
(b) The Secretary of Government Operations Department of General Services shall establish a formula to calculate the social cost of the eligible materials, as follows: and publish in the State Contracting Manual a method to take into account, during project bid review and award, information about product greenhouse gas emissions, as disclosed on environmental product declarations provided by bidders for eligible materials covered in subdivision (b) of Section 10170.

(1)The secretary shall quantify the social cost for the emission of a unit of Scope 1, Scope 2, and Scope 3 greenhouse gases in a number. In making this calculation, the secretary shall consult with the State Air Resources Board.

(2)The secretary shall develop a formula to quantify the emissions associated with transporting the eligible materials from manufacturer to project site. That formula shall be calculated by multiplying the fuels used or miles transported from the manufacturing location to the project site by a standard emissions factor for fuel type or distance for the particular form of transportation used in the transportation.

(3)The formula shall then take the number developed pursuant to paragraph (1) and multiply it by the amount of greenhouse gases that were emitted in the manufacturing of the materials, as listed in the Environmental Product Declaration that the prospective bidder submitted pursuant to subdivision (a) of Section 10170, and by the greenhouse gas emissions that will be produced in the transportation of those materials from the manufacturer to the project site.

(1) The method shall include calculations of greenhouse gas emissions attributed to transportation from factory gate to job site.
(2) In developing the method, the Department of General Services shall consider how a contracting department can apply a point system, discount system, or other system within the bid review process to ensure acknowledgment of benefits of bids that include manufacturers with lower-than-average greenhouse gas emissions, within the pool of bids, for the eligible material or materials.
(3) In developing the method, the Department of General Services shall consider establishing a historic baseline for greenhouse gas emissions from eligible materials. The department shall also consider linking the bid review system acknowledging greenhouse gas emissions levels to performance relative to the historic baseline, with the goal to continuously reduce the levels in current and future years.
(c) (1) On or before January 1, 2019, and annually thereafter, a department that awards a contract by calculating the lowest bid pursuant to this section shall prepare and submit to the Legislature and the Governor, as well as make available on its Internet Web site, a report that details the greenhouse gas emissions associated with those projects.
(2) The report shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.
(e) This section does not affect material choice or design of a project.

SEC. 3.SEC. 4.

 Section 10170 is added to the Public Contract Code, to read:

10170.
 (a) If the contract involves a project that uses eligible materials listed in subdivision (b), the department shall require from all prospective bidders the completion of a standard form stating the cumulative amount of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions that were produced in the material extraction and processing, transport to the manufacturing site, and manufacturing of the eligible materials to be used on the project. A prospective bidder shall satisfy this standard by attaching to that form a current facility-specific Environmental Product Declaration, Type III, as defined by the International Standard ISO 14025, 14040, and 14044, Organization for Standardization (ISO) standard 14025, or similarly robust life-cycle assessment methods that have uniform standards in data collection consistent with ISO standard 14025, industry acceptance, and integrity, for each eligible product material proposed to be used.
(b) For purposes of this section, “eligible materials” means cement, concrete, flat glass, manufacture wool, aluminum, iron, brass, or steel. Beginning on January 1, 2021, or on Two years after the date that the International Organization of Standardization for Standardization, or another comparable organization using standards that are consistent with ISO standard 14025, develops an Environmental Product Declaration for asphalt, whichever is earlier, a Product Category Rule for asphalt, “eligible materials” also includes asphalt.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.
(d) This section does not affect material choice or design of a project.
(e) In the event a contractor chooses to not use a material supplier that was reported in a winning bid, the contractor shall use a material supplier whose environmental product declaration for the eligible materials has the same or lower emissions than the supplier reported for the materials in the original bid.
(f) In the event a material supplier is unable to perform, the contractor shall make a good-faith effort to use a material supplier whose environmental product declaration for the eligible materials has the same or lower emissions than the original supplier reported and for a similar cost.

SEC. 4.SEC. 5.

 Section 10503.5 is added to the Public Contract Code, to read:

10503.5.
 (a) Notwithstanding Section 10501, in awarding contracts described in Section 10504.10, the Regents of the University of California shall calculate the lowest responsible bid by adjusting that portion of the bid on the base contract that represents the cost of the eligible materials listed in subdivision (b) of Section 10504.10 to incorporate the value of the social cost of those materials. The regents shall calculate the social cost of the materials by using the formula developed by the Secretary of Government Operations pursuant to subdivision (b) of Section 10130. use the method published in the State Contracting Manual pursuant to subdivision (b) of Section 10130 to take into account, during project bid review and award, greenhouse gas emissions of eligible materials listed in subdivision (b) of Section 10504.10, with the intent of reducing greenhouse gas emissions along the supply chain of projects.
(b) (1) On or before January 1, 2019, and annually thereafter, the Regents of the University of California shall prepare and submit to the Legislature and the Governor, as well as make available on its Internet Web site, a report that details the greenhouse gas emissions associated with any project that is awarded under this section.
(2) The report shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code.
(d) This section does not affect material choice or design of a project.

SEC. 5.SEC. 6.

 Section 10504.10 is added to the Public Contract Code, to read:

10504.10.
 (a) If the contract involves a project that uses eligible materials listed in subdivision (b), the Regents of the University of California shall require from all prospective bidders the completion of a standard form stating the cumulative amount of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions that were produced in the material extraction and processing, transport to the manufacturing site, and manufacturing of the eligible materials to be used on the project. A prospective bidder shall satisfy this standard by attaching to that form a current facility-specific Environmental Product Declaration, Type III, as defined by the International Standard ISO 14025, 14040, and 14044, Organization for Standardization (ISO) standard 14025, or similarly robust life-cycle assessment methods that have uniform standards in data collection consistent with ISO standard 14025, industry acceptance, and integrity, for each eligible product material proposed to be used.
(b) For purposes of this section, “eligible materials” means cement, concrete, flat glass, manufacture wool, aluminum, iron, brass, or steel. Beginning on January 1, 2021, or on Two years after the date that the International Organization of Standardization for Standardization, or another comparable organization using standards that are consistent with ISO standard 14025, develops an Environmental Product Declaration for asphalt, whichever is earlier, a Product Category Rule for asphalt, “eligible materials” also includes asphalt.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.
(d) This section does not affect material choice or design of a project.
(e) In the event a contractor chooses to not use a material supplier that was reported in a winning bid, the contractor shall use a material supplier whose environmental product declaration for the eligible materials has the same or lower emissions than the supplier reported for the materials in the original bid.
(f) In the event a material supplier is unable to perform, the contractor shall make a good-faith effort to use a material supplier whose environmental product declaration for the eligible materials has the same or lower emissions than the original supplier reported and for a similar cost.

SEC. 6.SEC. 7.

 Section 10727 is added to the Public Contract Code, to read:

10727.
 (a) Notwithstanding Section 10722, in awarding contracts described in Section 10768, the trustees shall calculate the lowest responsible bid by adjusting that portion of the bid on the base contract that represents the cost of the eligible materials listed in subdivision (b) of Section 10768 to incorporate the value of the social cost of those materials. The trustees shall calculate the social cost of the materials by using the formula developed by the Secretary of Government Operations pursuant to subdivision (b) of Section 10130. use the method published in the State Contracting Manual pursuant to subdivision (b) of Section 10130 to take into account, during project bid review and award, greenhouse gas emissions of eligible materials listed in subdivision (b) of Section 10768, with the intent of reducing greenhouse gas emissions along the supply chain of projects.
(b) (1) On or before January 1, 2019, and annually thereafter, the trustees shall prepare and submit to the Legislature and the Governor, as well as make available on its Internet Web site, a report that details the greenhouse gas emissions associated with any project that is awarded under this section.
(2) The report shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code.
(d) This section does not affect material choice or design of a project.

SEC. 7.SEC. 8.

 Section 10768 is added to the Public Contract Code, to read:

10768.
 (a) If the contract involves a project that uses eligible materials listed in subdivision (b), the trustees shall require from all prospective bidders the completion of a standard form stating the cumulative amount of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions that were produced in the material extraction and processing, transport to the manufacturing site, and manufacturing of the eligible materials to be used on the project. A prospective bidder shall satisfy this standard by attaching to that form a current Environmental Product Declaration, Type III, as defined by the International Standard ISO 14025, 14040, and 14044, Organization for Standardization (ISO) standard 14025, or similarly robust life-cycle assessment methods that have uniform standards in data collection consistent with ISO standard 14025, industry acceptance, and integrity, for each eligible product material proposed to be used.
(b) For purposes of this section, “eligible materials” means cement, concrete, flat glass, manufacture wool, or steel. Beginning on January 1, 2021, or on Two years after the date that the International Organization of Standardization for Standardization, or another comparable organization using standards that are consistent with ISO standard 14025, develops an Environmental Product Declaration for asphalt, whichever is earlier, a Product Category Rule for asphalt, “eligible materials” also includes asphalt.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.
(d) This section does not affect material choice or design of a project.
(e) In the event a contractor chooses to not use a material supplier that was reported in a winning bid, the contractor shall use a material supplier whose environmental product declaration for the eligible materials has the same or lower emissions than the supplier reported for the materials in the original bid.
(f) In the event a material supplier is unable to perform, the contractor shall make a good-faith effort to use a material supplier whose environmental product declaration for the eligible materials has the same or lower emissions than the original supplier reported and for a similar cost.