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LEAGUE OF WOMEN VOTERS OF CALIFORNIA EDUCATION FUND	Nonpartisan Pros & Cons of PROPOSITION 35 PUBLIC WORKS PROJECTS. USE OF PRIVATE CONTRACTORS FOR ENGINEERING AND ARCHITECTURAL SERVICES.
	Initiative Constitutional Amendment and Statute

THE QUESTION

Should the California Constitution be amended to allow state, regional and local governments to contract with private entities for engineering and architectural services?

THE SITUATION

Under existing California law, services provided by state agencies must be provided by civil service employees. Exceptions can be made when services are (1) of a temporary nature, (2) not available within the civil service or (3) are highly specialized or technical. State agencies frequently contract out with private firms for environmental impact studies, as well as architectural and engineering services, but can do so only if the above exceptions apply. Local governments, however, can usually contract with private firms for any needed services.

Before the 1970s, any private firm could submit bids for state-funded construction projects. Firms would be chosen on the basis of competitive cost bids, with design and engineering qualifications being secondary. However, in the early 1970s, the Brooks Act became federal law. The act established the Qualifications Based Selection (QBS) process, which provides for advertising of needed services and selection of the firm deemed best qualified for those services. The California Legislature adopted the federal QBS criteria in 1990 for negotiating and awarding state and local architectural or engineering contracts.

THE PROPOSAL

Proposition 35 would:

• remove existing restrictions on the state's ability to contract with private firms for architectural and engineering services

• define "architectural and engineering services" to include all architectural, landscape architectural, environmental, engineering, land surveying, and construction management services

• specifically include all projects in the State Transportation and Improvement Program

• require contracts to be awarded through a fair, competitive selection process.

FISCAL EFFECT

According to the Legislative Analyst, contracting with private firms for architectural and engineering services would be easier if restrictions were eliminated. Therefore, the state would probably contract out more of these services. But the fiscal effect of those contracts would depend largely on two variables: the cost of services, and the impact on construction project delivery.

Cost of services
The relative costs of salaries and benefits for state employees compared to costs for private firms will vary from project to project. Additionally, a sudden increase in construction activity might mean the hiring and training of new state employees, an added cost factor.

Construction project delivery
Contracting out could be more expedient and prevent the build-up of staff that may be needed only temporarily. In addition, earlier project completions could result in lower construction-related expenses.

Due to the variable nature of these cost considerations, the net impact on state costs is unknown.

SUPPORTERS SAY

• Proposition 35 will restore to state and local governments, special districts and school districts the choice to contract with private sector firms for architectural and engineering services, something 49 states do already.

• Private contractors, as in the existing law, would be chosen based on their qualifications.
  

• Proposition 35 will delay construction of roads, schools, health care facilities and other projects. Traffic congestion will get worse.

• The real purpose of Proposition 35 is to benefit huge engineering corporations that paid to put the proposition on the ballot.
  

Analysis prepared by the League of Women Voters of California Education Fund
for the November 7, 2000 Election.