Ventura County Grand Jury • 1995-1996

General Services Agency(GSA) Purchasing, Job Order Contracting (joc)

Published: April 23, 1996 3 pages
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Findings 8 findings

F1
The JOC contract is a sole source contract. This means a project can be assigned to the JOC General Contractor without using the full purchasing cycle. This generally prevents local businesses from having the opportunity to bid on County projects.
F2
On April 1, 1996 a multiple year contract was awarded to an out-of-state General Contractor for $3 million dollars per year with a four year county option (equals $15 million dollars) to renew.
F3
The Purchasing Department believes that this type of contract would benefit local contractors by providing an umbrella for smaller local contractors who are unable to meet insurance requirements. However, the contract does not specifically state that the General Contractor must use local subcontractors or material suppliers. Ventura County businesses and sub-contractors may not benefit from this multi-million dollar contract.
F4
The contract was awarded to an out-of-state General Contractor. The state of California only licenses out-of-state contractors if they have a qualifying RME or RMO (Responsible Managing Officer). This corporation qualified for their license with a Responsible Managing Employee (RME) who had resided in California at the time he originally applied for his license. The out-of-state General Contractor has been licensed in the state of California since July 26, 1995. The General Contractor's license is in effect as long as they have the RME/RMO that qualified for the license employed with their company. Upon the RME/RMO leaving employment the General Contractor must notify the CSLB and provide documentation within 90 days to re-qualify with a new RME/RMO or their license will be revoked. The General Contractor's license number was verified that it was valid and active prior to award.
F5
The Purchasing Department was unaware the General Contractor had an RME. Section 7068 of the Contractors License Law requires that a Responsible Managing Employee (RME) be "an individual who is a bona fide employee of the applicant and is actively engaged in the classification of work for which that RME is the qualifying person in behalf of the applicant."
F6
The function of the RME is to "be responsible for exercising that direct supervision and control of his/her employer's or principal's construction operations as is necessary to secure full compliance with the provisions of this chapter and the rules and regulations of the Board relating to the construction operations." The Contractors State License Board (CSLB) Rules and Regulations #823 requires: a. The RME be an employee who is permanently employed by the applicant and is actively engaged in the operation of the applicant's contracting business for at least 32 hours or 80% of the total hours per week such business is in operation, whichever is less. b. The RME have "direct supervision and control" including any one or any combination of the following activities: supervising construction, managing construction activities by making technical and administrative decisions, checking jobs for proper workmanship or direct supervision on construction job sites.
F7
The letter submitted to Ventura County by the General Contractor to clarify the 26 compliance issue of the RME stated "To the best of my knowledge we are in full compliance with all requirements under contract number 3282". The letter did not address the issue of "Where are the RME(s)?".
F8
Other city and county agencies prefer the traditional bid advertising process because it allows the small local contractors to bid. In cases where the jobs are small, cities and counties are able to obtain better prices.

Recommendations 5