AB1786 - Public contracts: best value construction contracting for counties, cities, and the San Gabriel Valley Council of Governments.

Enrolled August 24, 2026 Passed IN Senate August 19, 2026 Passed IN Assembly August 20, 2026 Amended IN Senate June 18, 2026 Amended IN Assembly March 12, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1786 Introduced by Assembly Member Harabedian February 10, 2026 An act to amend Sections 20155, 20155.1, 20155.3, 20155.4, 20155.5, 20155.6, 20155.7, and 20155.9 of, and to amend the heading of Article 3.7 (commencing with Section 20155) of Chapter 1 of Part 3 of Division 2 of, the Public Contract Code, relating to public contracts. LEGISLATIVE COUNSEL'S DIGEST AB 1786, Harabedian. Public contracts: best value construction contracting for counties, cities, and the San Gabriel Valley Council of Governments. Existing law establishes a program to allow counties to select a bidder on the basis of best value, as defined, for construction projects in excess of $1,000,000. Existing law also authorizes counties to use a best value construction contracting method to award individual annual contracts, not to exceed $3,000,000, for repair, remodeling, or other repetitive work to be done according to unit prices, as specified. Existing law establishes procedures and criteria for the selection of a best value contractor and requires that bidders verify specified information under oath. Existing law requires the board of supervisors of a participating county to submit a report that contains specified information about the projects awarded using the best value procedures described above to the appropriate policy committees of the Legislature and the Joint Legislative Budget Committee before March 1, 2029. Existing law repeals the program provisions on January 1, 2030. This bill would, instead, authorize a county, city, or the San Gabriel Valley Council of Governments to select a bidder on the basis of best value, as described above, for construction projects in excess of $500,000, would make various conforming changes to the above-described provisions, and would extend the operation of those provisions until January 1, 2032. With regard to the above-specified reporting requirement, the bill would, instead, require the governing body of a participating county, city, or the San Gabriel Valley Council of Governments to submit the report, as specified, to the appropriate policy committees of the Legislature and the Joint Legislative Budget Committee before March 1, 2031. The bill would expand the crime of perjury by extending the operation of the program and expanding the program to cities and the San Gabriel Valley Council of Governments, thereby imposing a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would make legislative findings and declarations as to the necessity of a special statute for the San Gabriel Valley. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. The heading of Article 3.7 (commencing with Section 20155) of Chapter 1 of Part 3 of Division 2 of the Public Contract Code is amended to read: Article 3.7. Best Value Construction Contracting for Counties, Cities, and the San Gabriel Valley Council of Governments SEC. 2. Section 20155 of the Public Contract Code is amended to read: 20155. (a) This article provides optional authority for a best value procurement program for construction projects in excess of five hundred thousand dollars ($500,000) for participating counties, cities, and the San Gabriel Valley Council of Governments. (b) The governing body of a participating county, city, or the San Gabriel Valley Council of Governments shall let any contract for a construction project pursuant to this article to the bidder representing the best value or else reject all bids. (c) The bidder may be selected on the basis of the best value to the county, city, or San Gabriel Valley Council of Governments. In order to implement this method of selection, the governing body shall adopt and publish procedures and required criteria that ensure that all selections are conducted in a fair and impartial manner. These procedures shall conform to Sections 20155.3 to 20155.6, inclusive. (d) If the governing body deems it to be in the best interest of the participating county, city, or the San Gabriel Valley Council of Governments, on the refusal or failure of the successful bidder for a project to execute a tendered contract, the governing body may award it to the bidder with the second lowest best value score, as determined in accordance with subdivision (c) of Section 20155.5 and thereafter to the third lowest best value score, if necessary. (e) (1) A county may also use the best value construction contracting method set out in this article to award individual annual contracts, which shall not exceed three million dollars ($3,000,000), adjusted annually to reflect the percentage change in the California Consumer Price Index, for repair, remodeling, or other repetitive work to be done according to unit prices. The contracts shall be based on plans and specifications for typical work. No annual contracts may be awarded for any new construction. (2) For purposes of this subdivision, best value criteria shall be applied to the annual contract for construction services, rather than to an individual, specific project. Annual contracts may be extended or renewed for two subsequent annual terms and a maximum of six million dollars ($6,000,000) over the subsequent two terms of the contract. Contract values shall be adjusted annually to reflect the percentage change in the California Consumer Price Index. (3) For purposes of this subdivision, “unit price” means the amount paid for a single unit of an item of work, and “typical work” means a work description applicable universally or applicable to a large number of individual projects, as distinguished from work specifically described with respect to an individual project. For purposes of this section, “repair, remodeling, or other repetitive work to be done according to unit prices” shall not include design or contract drawings. SEC. 3. Section 20155.1 of the Public Contract Code is amended to read: 20155.1. As used in this article: (a) “Best value” means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications. (b) “Best value contract” means a competitively bid contract entered into pursuant to this article. (c) “Best value contractor” means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract. (d) City means any chartered or general law city. (e) “County” means any chartered or general law county and includes a city and county. (f) “Demonstrated management competency” means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity. (g) “Financial condition” means the financial resources needed to perform the contract. The criteria used to evaluate a bidder’s financial condition shall include, at a minimum, capacity to obtain all required payment bonds, performance bonds, and liability insurance. (h) “Labor compliance” means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidder’s labor compliance shall include, as a minimum, the bidder’s ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with those requirements, and its past conformance with requirements to pay prevailing wages on public works projects. (i) “Qualifications” means the financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record of the bidder, and, if required by the bidding documents, some or all of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work. A county, city, or the San Gabriel Valley Council of Governments shall evaluate financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record, using, to the extent possible, quantifiable measurements. (j) “Relevant experience” means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity. (k) “Safety record” means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidder’s safety record shall include, at a minimum, its experience modification rate for the most recent three-year period, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period. SEC. 4. Section 20155.3 of the Public Contract Code is amended to read: 20155.3. A county, city, or the San Gabriel Valley Council of Governments shall proceed in accordance with the following when awarding best value contracts under this article: (a) The county, city, or San Gabriel Valley Council of Governments shall not select a bidder on the basis of the best value to a county, city, or the San Gabriel Valley Council of Governments unless, after evaluating at a public meeting the alternative of awarding the contract on the basis of the lowest bid price, the county, city, or San Gabriel Valley Council of Governments makes a written finding that awarding the contract on the basis of best value, for the specific project under consideration, will accomplish one or more of the following objectives: reducing project costs, expediting the completion of the project, or providing features not achievable through awarding the contract on the basis of the lowest bid price. (b) The county, city, or San Gabriel Valley Council of Governments shall prepare a solicitation for bids and give notice pursuant to Section 20125. A county, city, or the San Gabriel Valley Council of Governments may identify specific types of subcontractors that are required to be included in the bids. A county, city, or the San Gabriel Valley Council of Governments shall comply with Chapter 4 (commencing with Section 4100) of Part 1 with regard to construction subcontractors identified in the bid. (c) The county, city, or San Gabriel Valley Council of Governments shall establish a procedure to prequalify bidders pursuant to Section 20101. The information required pursuant to this section shall be verified under oath by the bidder in the manner in which civil pleadings in civil actions are verified. Information submitted by the bidder as part of the evaluation process shall not be open to public inspection to the extent that information is exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (d) Each solicitation for bids shall do all of the following: (1) Invite prequalified bidders to submit sealed bids in the manner prescribed by this article. (2) Include a section identifying and describing the following: (A) Criteria that the county, city, or San Gabriel Valley Council of Governments will consider in evaluating bids. (B) The methodology and rating or weighting system that will be used by the county, city, or San Gabriel Valley Council of Governments in evaluating bids. (C) The relative importance or weight assigned to the criteria identified in the request for bids. (e) Final evaluation of the best value contractor shall be done in a manner that prevents cost or price information from being revealed to the committee evaluating the qualifications of the bidders prior to completion and announcement of that committee’s decision. SEC. 5. Section 20155.4 of the Public Contract Code is amended to read: 20155.4. (a) A best value contractor shall not be prequalified or shortlisted unless the contractor provides an enforceable commitment to the county, city, or San Gabriel Valley Council of Governments that the contractor and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1. (b) This section shall not apply if any of the following requirements are met: (1) The county, city, or San Gabriel Valley Council of Governments has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract to use a skilled and trained workforce, and the contractor agrees to be bound by that project labor agreement. (2) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the county, city, or San Gabriel Valley Council of Governments prior to January 1, 2017. (3) The contractor has entered into a project labor agreement that will bind the contractor and all its subcontractors at every tier performing the project or contract to use a skilled and trained workforce. (c) For purposes of this section, “project labor agreement” has the same meaning as in paragraph (1) of subdivision (b) of Section 2500. SEC. 6. Section 20155.5 of the Public Contract Code is amended to read: 20155.5. Selection of the best value contractor shall be made as follows: (a) (1) An evaluation committee appointed by the county, city, or San Gabriel Valley Council of Governments shall evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents, and shall assign a qualifications score to each bid. (2) A county, city, or the San Gabriel Valley Council of Governments shall establish written policies and procedures, consistent with applicable law, to ensure that members of an evaluation committee are free from conflicts of interest, if the county, city, or San Gabriel Valley Council of Governments has not already established applicable written policies and procedures. (b) A county, city, or the San Gabriel Valley Council of Governments shall not award a contract for a construction project pursuant to this article if a solicitation for bids for that construction project results in the submission of fewer than three responsive bids to the county, city, or San Gabriel Valley Council of Governments for evaluation. (c) Except as provided in subdivision (d) of Section 20155, the [Text truncated for display. Full text available on Congress.gov.]