California

Key Agency(ies):  

• The Department of General Services (DGS) is the main procurement agency for the State of California.
• The Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE) handles suspension and debarment proceedings for public works.

Key Statute:

• Purchasing is governed by the California Public Contract Code, codified at:
• Cal. Pub. Cont. Code Division 2, Part 2, including:
• Cal. Pub. Cont. Code § 10100-10298
• Cal. Pub. Cont. Code § 10300-10311
• Cal. Pub. Cont. Code § 12100-12113
• Cal. Pub. Cont. Code § 19100-19102
• Link

Key Regulations:

• California Code of Regulations:
• CCR Title 2 (Administration), Division 2 (Financial Operations), Chapter 3 (Department of General Services)
• Subchapter 1. Department of General Services – Conflict of Interest Code
• Subchapter 1.5. Contract Protest Procedures; Protest Procedures for Consulting and Services Contracts
• Subchapter 7. Office of Procurement
• Subchapter 8. Office of Small Business Procurement and Contracts
• Subchapter 9. Small and Minority Business Procurement and Assistance Division – Target Area Contract Preference Act
• Subchapter 10. Small Business Office—Late Payments on State Contracts with Small Businesses
• Subchapter 10.5. Disabled Veteran Business Enterprise Participation Goal Program for State Contracts
• Subchapter 11. Employment and Economic Incentive Act Contract Preferences
• Subchapter 12. Personal Services Contracts
• Link
• State Contracting Manual (SCM):
• Issued by DGS, Procurement Division as a policy/procedural manual on how to comply with the PCC and CCR regulations
• Binding on state agencies
• Link

Procurement Types/Highlights:

• All contracts for the acquisition or lease of goods in an amount of $25,000 or higher shall be made or entered into with the lowest responsible bidder meeting specifications.
• Three competitive bids or proposals are required for contracts for services.
• IT and some service procurements allow “best value” evaluation under Cal. Pub. Cont. Code § 12100.7.

Bid Protests:

Regs Governing Bid Protests:

• General Protest Guidelines
• SCM Chapter 6 (Non-IT procedures)
• Alternative Protest Process
• SCM § 17-01 and/or §17-02

Eligible Protesters:

• Any bidder who has submitted a bid and is aggrieved may protest.
• For IT contracts, any participating bidder can protest if they believe the selection criteria were misapplied or unfair.
• For service/consulting contracts, only actual bidders or proposers may protest.

Timeliness Rules:

• General rule (non-IT contract):
• If award is not to lowest bidder, that bidder must be notified at least 24 hours before award.
• Protest must then be filed within that window before award, and a full written protest must be submitted within five days, outlining all grounds.
• IT Contracts:
• Protest must be filed no later than five working days after the intent to award (Notice of Intent to Award) is issued.
• Alternative Protest Process:
• Specific timelines apply, but core rule is also five working days after NOIA.

Protest Process:

• General protest process:
• If an award is not going to the lowest bidder, that bidder must be notified 24 hours before award.
• Any bidder who submitted a bid may file a protest with the Department of General Services on the grounds that they are the lowest responsible bidder meeting the specifications.
• Protest must be filed within 24 hours before award, excluding weekends and holidays.
• Within 10 days of filing, the protesting bidder must submit a detailed written statement with all facts and grounds for the protest.
• No award may be made until DGS resolves the protest.
• IT Contract Process:
• After the state announces an intent to award, bidders have five working days to file a protest.
• The Director of Technology for the California Department of Technology or DGS decides the protest.

Appeals:

• Non-IT protests:

• Contractors can appeal to the DGS deputy director – Procurement Division.

• IT protests:

• Contractors can appeal the protest decision to the DGS deputy director Procurement Division.

• If still unsatisfied, the protester can seek judicial relief through:

• Petition for writ of mandate under the California Code of Civil Procedure
• Petition to confirm/correct/vacate arbitration award (if the protest is arbitrated)

Claims: 

• Claims must be brought within six months of:
• The contracting agency’s final written decision under the contract’s claim provisions, OR
• The accrual of the cause action (if no contract claim provision exists).
• If the state fails to act, the contractor’s claim is deemed denied.
• If denied, the contractor can pursue:
•  Arbitration for public works under the State Contract Act, under PCC § 10240.
• All other contracts may seek court action under PCC § 19100.

Suspension & Debarment:

• Both state and local agencies can issue debarments or suspensions.
• Each jurisdiction maintains its own lists of suspended or debarred contractors.
• Grounds for suspension/debarment include:
• Violations of state procurement laws and regulations
• Misconduct, nonperformance, fraud or violations of labor and employment standards
• State-level suspension and debarment proceedings pertaining to labor law/public works are overseen by the Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE)
• State-level suspension and debarment proceedings pertaining to other issues run though the DGS.

Interesting/Distinctions: 

• All non-IT services contracts must be approved by DGS’ Office of Legal Services unless the contract is exempt from approval. Cal. Pub. Cont. Code § 10295.
• California has a pilot alternative protest procedure for participating agencies and bidders whereby any nonfrivolous protest shall be resolved by arbitration. Cal. Pub. Cont. Code § 12126(c)(5). Additionally, a contract may still be entered pending final decision on the protest. Id. at (c)(1).
• The second-lowest bidder may bring an action in Superior Court if the bidder suffers damages as a result of its bid due to the successful bidder’s violation of any provision of the Labor and/or Unemployment Insurance Code. Cal. Pub. Cont. Code § 19102(a)(1).
• The DGS may use a negotiation process for contracts for goods, services, IT, and telecommunications if one or more of various conditions exist, including the business need (which may make a negotiation process preferable or the development of a solicitation response prohibitively costly), the best interests of the state, the need for value, etc. Cal. Pub. Cont. Code § 6611(a).
• In establishing the procedures and guidelines for the negotiation process, the DGS must include a clear description of the methodology to be used in evaluating such bids and may include provisions for supplemental bids. Id. at (c).
• Importantly, an unsuccessful bidder under the negotiation process has no right to protest the results, but may resort to a writ of mandate under California's Rules of Civil Procedure (a writ to compel performance of an act which the law specially enjoins). Id. at (d).