By Constance Schwindt, Partner
Lindsay Thorson, Senior Associate
and Andreas Chialtas, Partner
Cerritos Office
Existing law requires school districts that have declared property surplus and have passed a resolution of the intent to sell or lease the surplus property to first offer the property to certain entities specified in the Education Code and Government Code, such as cities, counties, recreation departments, special education or child care providers, depending on the type of property. The recent passage of Senate Bill 1016 ("SB 1016") alters the existing law by placing charter schools first in priority for notification and acquisition of surplus real property if certain criteria are met.
This new legislation now gives charter schools first priority over other entities if both of the following circumstances exist: (1) if the subject property was designed to provide direct instruction or instructional support; and (2) the charter school has submitted a written request to a school district to receive notification of surplus property for sale or lease. If these two conditions are met, the school district must offer the property to the charter school before any other entity.
Showing posts with label Facilities/Construction. Show all posts
Showing posts with label Facilities/Construction. Show all posts
Wednesday, August 15, 2012
Friday, July 13, 2012
May A Public Entity Reject An Unbalanced Bid?
By Joe Rossini, Senior Associate
and Hugh Lee, Partner
Cerritos Office
Recently, a number of the Firm’s local public entity clients have contacted us with questions regarding the issue of “unbalanced bids.” These clients generally want to know when they should reject an unbalanced bid and the guidelines for evaluating unbalanced bids. There is little California legal authority on the subject. Typically, in the absence of California authority, this state’s courts will look to both federal procurement laws and regulations, and decisions by courts in other states.
Section 15.814, 48 Code of Federal Regulations, defines a “mathematically unbalanced” bid as a bid “based on prices which are significantly less than cost for some contract line items and significantly overstated in relation to cost for others.” A bidder will typically submit an unbalanced bid with either or both of two goals: 1) To manipulate the bidding process in its favor to win award of the contract, even though the public entity would ultimately pay a higher total price for the goods or services; and 2) To improve their cash flow by front loading a bid’s payment schedule.
and Hugh Lee, Partner
Cerritos Office
Recently, a number of the Firm’s local public entity clients have contacted us with questions regarding the issue of “unbalanced bids.” These clients generally want to know when they should reject an unbalanced bid and the guidelines for evaluating unbalanced bids. There is little California legal authority on the subject. Typically, in the absence of California authority, this state’s courts will look to both federal procurement laws and regulations, and decisions by courts in other states.
Section 15.814, 48 Code of Federal Regulations, defines a “mathematically unbalanced” bid as a bid “based on prices which are significantly less than cost for some contract line items and significantly overstated in relation to cost for others.” A bidder will typically submit an unbalanced bid with either or both of two goals: 1) To manipulate the bidding process in its favor to win award of the contract, even though the public entity would ultimately pay a higher total price for the goods or services; and 2) To improve their cash flow by front loading a bid’s payment schedule.
Friday, June 8, 2012
LEEDing the Way
By Bryce Chastain, Senior Associate
Pleasanton Office
As a LEED accredited attorney, I thought it was time to address a question that seems to cross many of our clients' minds: Should we aim for LEED certification (whether on a specific project, or as a matter of general policy)?
First, for those who may be unfamiliar, LEED,which stands for Leadership in Energy and Environmental Design, is a system of rating construction projects based on environmental considerations, from open space to sustainability of construction materials to energy efficiency. LEED was created by the U.S. Green Building Council (USGBC), a non-profit organization that advocates for sustainable development practices, and is now administered by the Green Building Certification Institute (GBCI), a for-profit corporation started by USGBC in 2008. As the USGBC describes it: "LEED certification provides independent, third-party verification that a building, home or community was designed and built using strategies aimed at achieving high performance in key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality." (More information here)
LEED has become increasingly well known, but not well understood. We thought it would be helpful for our clients and blog followers to know a little bit about the benefits of LEED, what it is not so good for, and offer some guideline on how to ensure that LEED is evaluated and best used.
Pleasanton Office
As a LEED accredited attorney, I thought it was time to address a question that seems to cross many of our clients' minds: Should we aim for LEED certification (whether on a specific project, or as a matter of general policy)?
First, for those who may be unfamiliar, LEED,which stands for Leadership in Energy and Environmental Design, is a system of rating construction projects based on environmental considerations, from open space to sustainability of construction materials to energy efficiency. LEED was created by the U.S. Green Building Council (USGBC), a non-profit organization that advocates for sustainable development practices, and is now administered by the Green Building Certification Institute (GBCI), a for-profit corporation started by USGBC in 2008. As the USGBC describes it: "LEED certification provides independent, third-party verification that a building, home or community was designed and built using strategies aimed at achieving high performance in key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality." (More information here)
LEED has become increasingly well known, but not well understood. We thought it would be helpful for our clients and blog followers to know a little bit about the benefits of LEED, what it is not so good for, and offer some guideline on how to ensure that LEED is evaluated and best used.
Friday, May 18, 2012
May Districts Impose Local Vendor Bid Preferences?
By Suparna Jain, Associate
and Hugh Lee, Partner
Cerritos Office
In an effort to help spur local economic growth and opportunity, especially during times of financial hardship, there have been many inquiries into whether school and community college districts may impose local vendor bid preferences on their bids.
Pursuant to Public Contract Code sections 20111 and 20651, school and community college districts are required to competitively bid any contract involving an expenditure of more than $81,000 (adjusted annually) for equipment, materials or supplies to be furnished, sold, or leased to a school district, and services, except construction services and repairs, including maintenance as defined in Section 20115. As required by law, a school district and community college district must award such competitively bid contracts to the lowest responsible bidder. The public policy behind the statutes on competitive bidding is to enhance competition and to prevent corruption and undue influence. Competitive bidding also guards against favoritism, extravagance, fraud, and serves the public by preventing waste and securing the best economic result. A contract made without compliance with competitive bidding, where such bidding is required by statute, is void and unenforceable as being in excess of the public agency’s power.
and Hugh Lee, Partner
Cerritos Office
In an effort to help spur local economic growth and opportunity, especially during times of financial hardship, there have been many inquiries into whether school and community college districts may impose local vendor bid preferences on their bids.
Pursuant to Public Contract Code sections 20111 and 20651, school and community college districts are required to competitively bid any contract involving an expenditure of more than $81,000 (adjusted annually) for equipment, materials or supplies to be furnished, sold, or leased to a school district, and services, except construction services and repairs, including maintenance as defined in Section 20115. As required by law, a school district and community college district must award such competitively bid contracts to the lowest responsible bidder. The public policy behind the statutes on competitive bidding is to enhance competition and to prevent corruption and undue influence. Competitive bidding also guards against favoritism, extravagance, fraud, and serves the public by preventing waste and securing the best economic result. A contract made without compliance with competitive bidding, where such bidding is required by statute, is void and unenforceable as being in excess of the public agency’s power.
Monday, April 30, 2012
Sound Asset Management and Planning in Tough Financial Times
By Andreas Chialtas, Partner
and Lindsay Thorson, Senior Associate
Cerritos Office
Mounting financial pressure experienced by most K-12 school districts and community college districts throughout California necessitates more efficient use of district real property. Improved efficiency requires more than just knowing the law. The beneficial use and disposition of district property can take many forms such as selling property, generating lease income, decreasing the cost of operations and maintenance through shared use with other public agencies, or any combination of these. Given the myriad of options, it is clear that there is no “one-size-fits-all” approach. With this reality in mind, we recommend that district board members and trustees first get back to basics before undertaking the formal steps in any transaction, and follow some best practice approaches related to planning and community involvement. This will result in an outcome that can withstand public scrutiny while simultaneously providing financial relief.
So where to begin? First, districts should slow down…and plan. Tasked with momentous goals of educating students and improving student performance in these tough economic times, it is understandable that district decision-makers want to act quickly. Nevertheless, district board members and trustees should not rush to take action in this current market without sound planning. For example, in order to prevent sale or lease of properties at "fire sale" prices and to help districts maximize their options, we encourage good asset management and planning, an appropriate level of community outreach, and communication of districts’ desired goals.
and Lindsay Thorson, Senior Associate
Cerritos Office
Mounting financial pressure experienced by most K-12 school districts and community college districts throughout California necessitates more efficient use of district real property. Improved efficiency requires more than just knowing the law. The beneficial use and disposition of district property can take many forms such as selling property, generating lease income, decreasing the cost of operations and maintenance through shared use with other public agencies, or any combination of these. Given the myriad of options, it is clear that there is no “one-size-fits-all” approach. With this reality in mind, we recommend that district board members and trustees first get back to basics before undertaking the formal steps in any transaction, and follow some best practice approaches related to planning and community involvement. This will result in an outcome that can withstand public scrutiny while simultaneously providing financial relief.
So where to begin? First, districts should slow down…and plan. Tasked with momentous goals of educating students and improving student performance in these tough economic times, it is understandable that district decision-makers want to act quickly. Nevertheless, district board members and trustees should not rush to take action in this current market without sound planning. For example, in order to prevent sale or lease of properties at "fire sale" prices and to help districts maximize their options, we encourage good asset management and planning, an appropriate level of community outreach, and communication of districts’ desired goals.
Monday, April 2, 2012
Public Agencies Can Now Use Their Own Employees Through Force Accounts, or Hire Other Entities Through Negotiated Contracts or Purchase Orders for Construction Projects Under $45,000, if they Opt into the Uniform Cost Accounting Act
By Stephen McLoughlin, Associate
and Hugh Lee, Partner
Cerritos Office
The Uniform Cost Accounting Act at Public Contract Code section 22000 et seq. (“UCAA”) allows participating agencies to avoid the formal bidding procedure for projects that fall under certain cost thresholds. The UCAA includes two thresholds: 1) the "Direct Hire Threshold" which allows public agencies to hire their own employees through a force account or hire other entities directly through a negotiated contract or purchase order to perform public construction contracts and 2) the "Informal Bidding Threshold" which allows public agencies to use an informal bidding procedure. The threshold amounts set forth in the UCAA are periodically changed by the California legislature. As of January 1, 2012, the Direct Hire Threshold is $45,000, meaning any project costing $45,000 or less can be performed by the public agency's employees through a force account or the public agency can hire another entity directly through a negotiated contract or purchase order. The Informal Bidding Threshold is $175,000, meaning any contract costing $175,000 or less may be bid using the informal bidding procedure set forth in the UCAA. Any project over $175,000 must be let through formal bidding procedures.
Whenever the thresholds in the UCAA are changed, public agencies tend to reexamine whether opting into the UCAA is a good idea. In general, the UCAA is touted as a simplified bidding process. The ability to complete construction costs worth $45,000 or less without bidding is definitely appealing specifically to school districts when compared to the competitive bidding threshold of $15,000 under Public Contract Code section 20111. The informal bidding procedure, available for projects $175,000 or under, can also be a nice option as it allows school districts to avoid the formal bidding requirements of Public Contract Code section 20111. However, the UCAA does require public agencies to meet their own set of administrative requirements that can be laborious. Specifically, the public agency must pass a resolution opting into the UCAA and follow the notification procedures for informal bidding described in the UCAA.
and Hugh Lee, Partner
Cerritos Office
The Uniform Cost Accounting Act at Public Contract Code section 22000 et seq. (“UCAA”) allows participating agencies to avoid the formal bidding procedure for projects that fall under certain cost thresholds. The UCAA includes two thresholds: 1) the "Direct Hire Threshold" which allows public agencies to hire their own employees through a force account or hire other entities directly through a negotiated contract or purchase order to perform public construction contracts and 2) the "Informal Bidding Threshold" which allows public agencies to use an informal bidding procedure. The threshold amounts set forth in the UCAA are periodically changed by the California legislature. As of January 1, 2012, the Direct Hire Threshold is $45,000, meaning any project costing $45,000 or less can be performed by the public agency's employees through a force account or the public agency can hire another entity directly through a negotiated contract or purchase order. The Informal Bidding Threshold is $175,000, meaning any contract costing $175,000 or less may be bid using the informal bidding procedure set forth in the UCAA. Any project over $175,000 must be let through formal bidding procedures.
Whenever the thresholds in the UCAA are changed, public agencies tend to reexamine whether opting into the UCAA is a good idea. In general, the UCAA is touted as a simplified bidding process. The ability to complete construction costs worth $45,000 or less without bidding is definitely appealing specifically to school districts when compared to the competitive bidding threshold of $15,000 under Public Contract Code section 20111. The informal bidding procedure, available for projects $175,000 or under, can also be a nice option as it allows school districts to avoid the formal bidding requirements of Public Contract Code section 20111. However, the UCAA does require public agencies to meet their own set of administrative requirements that can be laborious. Specifically, the public agency must pass a resolution opting into the UCAA and follow the notification procedures for informal bidding described in the UCAA.
Friday, February 24, 2012
Power Purchase Agreement Projects are Now Covered by the California Prevailing Wage Law
By Bryce Chastain, Senior Associate
Pleasanton Office
and Hugh Lee, Partner
Cerritos Office
Effective January 1, 2012, the legislature expanded the definition of "public project" subject to the California prevailing wage law with criteria meant to cover Power Purchase Agreement ("PPA") projects built on public property, supplying at least half the generated power to the public property owner.
In a typical PPA the local educational agency ("LEA") agrees to lease LEA land, or rooftops, to a private company that will design, build and then own and operate a renewable energy facility. The LEA usually also agrees buy all of the electrical energy generated from the facility for a very long period - typically twenty or more years. The LEA benefits because it is projected to spend less on its electricity over that period than if it just kept buying from the local utility, but it does not have to the building of a solar (or other renewable energy) plant itself. There are also several key economic components on the private owner's side that make PPAs an attractive business, and make it possible for them to offer low rates for the energy produced from PPA facilities. An argument some PPA providers have pushed is that they can build the plant at lower cost because it would be exempt from the California prevailing wage law, but the law was not clear.
Pleasanton Office
and Hugh Lee, Partner
Cerritos Office
Effective January 1, 2012, the legislature expanded the definition of "public project" subject to the California prevailing wage law with criteria meant to cover Power Purchase Agreement ("PPA") projects built on public property, supplying at least half the generated power to the public property owner.
In a typical PPA the local educational agency ("LEA") agrees to lease LEA land, or rooftops, to a private company that will design, build and then own and operate a renewable energy facility. The LEA usually also agrees buy all of the electrical energy generated from the facility for a very long period - typically twenty or more years. The LEA benefits because it is projected to spend less on its electricity over that period than if it just kept buying from the local utility, but it does not have to the building of a solar (or other renewable energy) plant itself. There are also several key economic components on the private owner's side that make PPAs an attractive business, and make it possible for them to offer low rates for the energy produced from PPA facilities. An argument some PPA providers have pushed is that they can build the plant at lower cost because it would be exempt from the California prevailing wage law, but the law was not clear.
Friday, December 23, 2011
Decision Strengthens Public Agency Authority to Require Reasonable Notice of Delay Claims
By Hugh Lee, Partner
Cerritos Office
and Bryce Chastain, Senior Associate
Pleasanton Office
In a recent case, Greg Opinski Construction, Inc. vs. City of Oakdale (October, 2011), the California Court of Appeal strengthened the position of public agencies asserting notice of claim requirements against contractors in their public works contracts. The Court based its decision on Civil Code section 1511, which expressly permits a public entity to require the other party to give notices of delay claims caused by the party receiving the notice. The key is that the delay claim requirements must be “reasonable,” and, as the court noted, “just.”
This decision expressly overturned a decision from 1963 in the case of Peter Kiewit Sons’ Co. vs. Pasadena City Junior College, in which the California Supreme Court held that even if a public works prime contract requires the contractor to notify the owner of delays (whether to make a claim, or to avoid liquidated damages), the failure to meet such a requirement was excused where the delays involved were caused by the owner. As the Court in Greg Opinski Construction, Inc. noted, however, Civil Code section 1511 was amended soon after the Peter Kiewit Sons’ Co. case to add language allowing public entities to conditions delay claims on contractor compliance with reasonable notice procedures in the contract.
Cerritos Office
and Bryce Chastain, Senior Associate
Pleasanton Office
In a recent case, Greg Opinski Construction, Inc. vs. City of Oakdale (October, 2011), the California Court of Appeal strengthened the position of public agencies asserting notice of claim requirements against contractors in their public works contracts. The Court based its decision on Civil Code section 1511, which expressly permits a public entity to require the other party to give notices of delay claims caused by the party receiving the notice. The key is that the delay claim requirements must be “reasonable,” and, as the court noted, “just.”
This decision expressly overturned a decision from 1963 in the case of Peter Kiewit Sons’ Co. vs. Pasadena City Junior College, in which the California Supreme Court held that even if a public works prime contract requires the contractor to notify the owner of delays (whether to make a claim, or to avoid liquidated damages), the failure to meet such a requirement was excused where the delays involved were caused by the owner. As the Court in Greg Opinski Construction, Inc. noted, however, Civil Code section 1511 was amended soon after the Peter Kiewit Sons’ Co. case to add language allowing public entities to conditions delay claims on contractor compliance with reasonable notice procedures in the contract.
Monday, November 21, 2011
Dealing With the New Law Limiting Retention to Five Percent on Public Works Projects
By Hugh Lee, Partner
Irvine Office
and Bryce Chastain, Senior Associate
Pleasanton Office
Despite opposition from various public agency groups supporting school and community college districts, Senate Bill 293 was signed into law. The new law limits retention on public works projects to five percent. Codified as Public Contract Code section 7201, the limit on retention applies to all contracts entered into on or after January 1, 2012. Details about SB 293 can be found in our Alert here.
If your school or community college district is in the process or currently out to bid on construction projects that will be awarded after January 1, 2012, you should consider whether retention withholding of five percent is adequate to properly protect your district. Prior to SB 293, the industry standard for retention was ten percent. If you have concerns about withholding only five percent for retention, you should carefully consider exercising the exception in SB 293 to increase the retention percentage. Under the new law, a school or community college district can make a finding that a particular project is “substantially complex” and requires a higher retention amount than five percent. The public agency must make a finding during a properly noticed and normally scheduled board meeting and include the finding and the new retention amount in the bid documents prior to bid.
Irvine Office
and Bryce Chastain, Senior Associate
Pleasanton Office
Despite opposition from various public agency groups supporting school and community college districts, Senate Bill 293 was signed into law. The new law limits retention on public works projects to five percent. Codified as Public Contract Code section 7201, the limit on retention applies to all contracts entered into on or after January 1, 2012. Details about SB 293 can be found in our Alert here.
If your school or community college district is in the process or currently out to bid on construction projects that will be awarded after January 1, 2012, you should consider whether retention withholding of five percent is adequate to properly protect your district. Prior to SB 293, the industry standard for retention was ten percent. If you have concerns about withholding only five percent for retention, you should carefully consider exercising the exception in SB 293 to increase the retention percentage. Under the new law, a school or community college district can make a finding that a particular project is “substantially complex” and requires a higher retention amount than five percent. The public agency must make a finding during a properly noticed and normally scheduled board meeting and include the finding and the new retention amount in the bid documents prior to bid.
Monday, October 24, 2011
Uniform Public Construction Cost Accounting Act Bid Threshold Increases
By Anthony Niccoli, Senior Associate
and Hugh Lee, Partner
Cerritos Office
For those school and community college districts (and other public agencies) that have opted into the California Uniform Public Construction Cost Accounting Act ("UCAA"), at Public Contract Code Section 22000 et seq., your flexibility just increased. Back on July 1, 2011, Assembly Bill 943 increased the formal bidding threshold amount for public agencies that have opted into UCAA from $125,000 to $175,000. Correspondingly, the safe harbor triggered when all bids received exceed the formal bidding threshold, and the governing body of the public agency adopts a resolution by a four-fifths vote to award informally within the safe harbor, rose from $137,500 to $187,500.
and Hugh Lee, Partner
Cerritos Office
For those school and community college districts (and other public agencies) that have opted into the California Uniform Public Construction Cost Accounting Act ("UCAA"), at Public Contract Code Section 22000 et seq., your flexibility just increased. Back on July 1, 2011, Assembly Bill 943 increased the formal bidding threshold amount for public agencies that have opted into UCAA from $125,000 to $175,000. Correspondingly, the safe harbor triggered when all bids received exceed the formal bidding threshold, and the governing body of the public agency adopts a resolution by a four-fifths vote to award informally within the safe harbor, rose from $137,500 to $187,500.
Friday, October 21, 2011
Recent Sale of Bonds Yields Needed Funds for School Facility Program Projects
By Bryce Chastain, Senior Associate
Pleasanton Office
and Hugh Lee, Partner
Cerritos Office
The Office of Public School Construction ("OPSC") recently announced that the State successfully sold bonds on October 19th yielding "approximately $1 billion for School Facility Program projects." OPSC expects the State Allocation Board ("SAB") to include disbursement of the available funds "to projects on the unfunded list with valid priority funding certifications" on its December 2011 agenda. As OPSC noted, 187 school district certifications for 504 projects (306 modernization projects, 136 new construction projects and 62 projects from additional programs) are on the unfunded list. These 504 projects comprise a total of $1.34 billion. Accordingly, it appears that with about $1 billion in revenue becoming available, and $1.34 billion worth of projects on the unfunded list, there will be projects with valid priority funding certifications on the current unfunded list that still will not have money available.
Thursday, October 20, 2011
New Funding Coming Up for Natural Gas Busing
By Stephen McLoughlin, Associate
and Hugh Lee, Partner
Cerritos Office
Starting on January 1, 2012, local air quality management districts, aka air pollution control districts ("APCDs"), will have the ability to grant funds to school districts to help retrofit emission control equipment and replace natural gas tanks on school buses, as well as enhance school districts' existing natural gas fueling stations. These funds will come from surcharge fees collected by APCDs through the Department of Motor Vehicles. Once APCDs implement the surcharge, and collect it from the DMV, the resulting funds must be used for specific programs as set forth in Health and Safety Code sections 41081 and 44229. Now, with the passage of Assembly Bill Nos. 462 and 470, APCDs will have three new options for spending a limited portion of the surcharge starting in January 1, 2012:
1) Use the surcharge funds to retrofit emission control equipment for existing school buses in addition to purchasing new school buses.
2) Use the surcharge funds for replacement of natural gas tanks on school buses.
3) Use the surcharge funds for repair or upkeep natural gas fueling dispensers operated by school districts.
Of course, there are various eligibility requirements depending on the intended use of these funds that any applicant school district will have to meet. The funds will also be limited, and not immediately available. For more of these details, please check out our recent Alert on this new legislation here.
and Hugh Lee, Partner
Cerritos Office
Starting on January 1, 2012, local air quality management districts, aka air pollution control districts ("APCDs"), will have the ability to grant funds to school districts to help retrofit emission control equipment and replace natural gas tanks on school buses, as well as enhance school districts' existing natural gas fueling stations. These funds will come from surcharge fees collected by APCDs through the Department of Motor Vehicles. Once APCDs implement the surcharge, and collect it from the DMV, the resulting funds must be used for specific programs as set forth in Health and Safety Code sections 41081 and 44229. Now, with the passage of Assembly Bill Nos. 462 and 470, APCDs will have three new options for spending a limited portion of the surcharge starting in January 1, 2012:
1) Use the surcharge funds to retrofit emission control equipment for existing school buses in addition to purchasing new school buses.
2) Use the surcharge funds for replacement of natural gas tanks on school buses.
3) Use the surcharge funds for repair or upkeep natural gas fueling dispensers operated by school districts.
Of course, there are various eligibility requirements depending on the intended use of these funds that any applicant school district will have to meet. The funds will also be limited, and not immediately available. For more of these details, please check out our recent Alert on this new legislation here.
Tuesday, October 11, 2011
Department Of Industrial Relations Discontinues Third Party Labor Compliance Program Approvals
By Hugh Lee, Partner
Cerritos Office
and Bryce Chastain, Senior Associate
Pleasanton Office
Recently, the Department of Industrial Relations (“DIR”) announced that, effective September 1, 2011, it “discontinue[d] separate approval of third party LCPs.” A third party LCP is a DIR-approved provider of labor compliance services that provides those services, by contract, to an awarding body. DIR is, in their own words, “ending the existing approval of private [LCP] programs and grandfathering those approvals over to awarding bodies,” and will only be granting new approvals to awarding bodies going forward. While DIR’s notice will have minimal impact on awarding bodies such as school and community college districts that maintain and enforce their own approved LCPs with their own personnel, the impact on awarding bodies that rely on third party LCPs is more significant. How does this affect your district?
Districts that have had their own LCPs aren’t significantly affected by this change, unless they have contracted with a third party to administer the program. Districts that have had their own LCPs, but have utilized third party LCP consultants or administrators will still have their LCPs, but their relationship with their third party LCP consultants may need to change. Districts that have used third party LCP providers running DIR-approved third party LCPs will see the biggest change, as those third party LCP providers no longer have approved LCPs. However, DIR “grandfathered” third party approvals over to districts that had preexisting contracts with third party LCPs. In other words, if your district was using a DIR-approved third party LCP before September 1, 2011, DIR should have transferred that approval, essentially ownership of the LCP, to your district. Now, your district has its own approved LCP, which you can simply continue to operate as your own.
Cerritos Office
and Bryce Chastain, Senior Associate
Pleasanton Office
Recently, the Department of Industrial Relations (“DIR”) announced that, effective September 1, 2011, it “discontinue[d] separate approval of third party LCPs.” A third party LCP is a DIR-approved provider of labor compliance services that provides those services, by contract, to an awarding body. DIR is, in their own words, “ending the existing approval of private [LCP] programs and grandfathering those approvals over to awarding bodies,” and will only be granting new approvals to awarding bodies going forward. While DIR’s notice will have minimal impact on awarding bodies such as school and community college districts that maintain and enforce their own approved LCPs with their own personnel, the impact on awarding bodies that rely on third party LCPs is more significant. How does this affect your district?
Districts that have had their own LCPs aren’t significantly affected by this change, unless they have contracted with a third party to administer the program. Districts that have had their own LCPs, but have utilized third party LCP consultants or administrators will still have their LCPs, but their relationship with their third party LCP consultants may need to change. Districts that have used third party LCP providers running DIR-approved third party LCPs will see the biggest change, as those third party LCP providers no longer have approved LCPs. However, DIR “grandfathered” third party approvals over to districts that had preexisting contracts with third party LCPs. In other words, if your district was using a DIR-approved third party LCP before September 1, 2011, DIR should have transferred that approval, essentially ownership of the LCP, to your district. Now, your district has its own approved LCP, which you can simply continue to operate as your own.
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