Senate panel advances bill letting school districts use "best value" for construction contracts

The Senate Education Committee voted to send Assembly Bill 361 to the Senate Appropriations Committee after a debate over whether expanding Los Angeles Unified School District's "best value" procurement pilot statewide would help deliver school construction more reliably or disadvantage small local contractors.

AB 361, offered by Assemblymember Schultz, would remove the sunset for LAUSD's best-value procurement method and make the option available to other school districts for five years. Proponents said the approach lets districts consider experience, quality and performance as well as price when awarding contracts for complex school construction projects.

"This alternative option allows but does not require a school district to evaluate price and other qualifications when awarding a contract," Sasha Horwitz of Los Angeles Unified School District told the committee in support. Horwitz said independent reviews show LAUSD saw fewer delays and change orders using the method.

Opponents, including school district representatives and some senators, warned the change could lock out smaller local contractors and raise costs in less densely populated regions where qualified bidders are scarce. Senator Choi pointed to family businesses in her district that could be negatively affected and urged caution. Senator Cabaldon, who supported the bill in committee, said he sees it as a local-control measure with guardrails and noted the bill contains reporting requirements and a five-year sunset for statewide application.

Committee members pressed proponents on how large the typical price difference is between the lowest bid and a best-value selection. Horwitz said she could not produce full data on the spot but estimated typical initial deltas were usually less than 20 percent and that the metric does not account for later costs from change orders and delays. The bill is voluntary — districts may opt in — and requires periodic reporting to the Legislature, supporters said.

The committee recorded the motion by Senator Cabaldon to pass AB 361 to Appropriations; the bill passed the committee with a 5-2 vote and was placed on call for absent members.

Why it matters: School construction spending will increase in coming years after 2024 bond measures, proponents said, and districts need tools to reduce project risk and avoid cost overruns. Opponents said procurement changes must avoid creating systemic advantages for larger bidders at the expense of local businesses and workers.

What’s next: AB 361 advances to the Senate Appropriations Committee for further fiscal review.