MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-Second Session
March 24, 2003
The Committee on Commerce and Laborwas called to order at 2:16 p.m., on Monday, March 24, 2003. Chairman David Goldwater presided in Room 4100 of the Legislative Building, Carson City, Nevada, and, via simultaneous videoconference, in Room 4401 of the Grant Sawyer State Office Building, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. David Goldwater, Chairman
Ms. Barbara Buckley, Vice Chairman
Mr. Bob Beers
Mr. David Brown
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. Josh Griffin
Mr. Lynn Hettrick
Mr. Ron Knecht
Ms. Sheila Leslie
Mr. John Oceguera
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
Mr. Morse Arberry Jr. (excused)
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Vance Hughey, Committee Policy Analyst
Wil Keane, Committee Counsel
Patricia Blackburn, Committee Secretary
OTHERS PRESENT:
Gregory A. Brower, Legislative Advocate, The Gordian Group
Harry H. Mellon, Chief Executive Officer, The Gordian Group
Mark Sullivan, Legislative Advocate, Associated General Contractors, Nevada Chapter
Sean Madole, Project Manager, Valley Hoe
Richard Daly, Business Manager, Laborers International Union, Local 169
Lori Ashton, Southwestern Regional Council of Carpenters
Al Bellister, Director of Research, Nevada State Education Association
Ernest Dale Oberhaus, Clark County School District
Steve Holloway, Executive Vice President, Associated General Contractors, Las Vegas Chapter
Danny Thompson, Executive Secretary/Treasurer, Nevada State AFL-CIO
Greg Smith, Administrator, Operating Engineers, Joint Apprenticeship Committee for Northern Nevada
David Kersh, Government Affairs Representative, Carpenters/Contractors Cooperation Committee, Inc.
John Simmons, Construction Manager, Public Works, City of Henderson
Jack Jeffrey, Legislative Advocate, Southern Nevada Building and Construction Trades Council
James E. Keenan, Nevada Public Purchasing Study Commission
Berlyn Miller, Legislative Advocate, Nevada Contractors Association
Mark Ireland, TAB Contractors, Inc.
Angela Ziel, Kaercher Insurance Agency, Inc.
Fred J. Courrier, Reno Area Manager, Frehner Construction Company, Inc.
Ruedy Edgington, Assistant Director-Operations, State of Nevada Department of Transportation
James Bell, Public Works Director, City of North Las Vegas
Marcus R. Jensen, Director of Engineering, Southern Nevada Water Authority
Brent C. Moser, Principal Civil Engineer, Construction Management Supervisor, Clark County Water Reclamation District
Ted J. Olivas, Assistant Director, Clark County Finance Department
Terry Johnson, Labor Commissioner, State of Nevada
Chairman Goldwater called the meeting to order at 2:16 p.m. A quorum was present. He noted there were six bills on the agenda and, since there was a Floor Session scheduled for 5:00 p.m., he hoped the witnesses would note that they were a very experienced Committee and brevity would be appreciated.
Chairman Goldwater opened the hearing on A.B. 167.
Assembly Bill 167: Establishes pilot program for use of indefinite quantity contracts by Clark County School District for certain public works. (BDR S-741)
Assemblyman David Brown, District No. 22, Clark County, introduced A.B. 167. He stated that this bill started as BDR S-741. An "S" BDR, he explained, was a special bill. This bill did not amend any provisions of the Nevada Revised Statutes (NRS); it was a proposed pilot program for the Clark County School District that would last for four years. A.B. 167 was intended to add responsiveness and cost savings to small Clark County School District construction projects that did not exceed $250,000. Mr. Brown stated that these projects were too large for in-house maintenance, but too small for the formal, time-consuming, and expensive bid submittal process. It would merely enable Clark County School District to enter into contracts of indefinite quantity, usually year-long contracts, which set the terms for the contract but not the quantity of work. The work was then ordered under "job orders" or a procedure similar to a purchase order. When work became available, Mr. Brown continued, Clark County School District could then issue a "job order" to a contractor who had successfully, competitively bid the year-long, indefinite quantity contract. The Clark County School District would not be required to continue issuing purchase orders or job orders to the contractor if they were not satisfied with the performance of that contractor. The bottom line, Mr. Brown stated, was to allow the School District to save money and address small construction matters on a timely basis.
Assemblyman Brown stated he had prepared a few amendments to A.B. 167 (Exhibit C). Section 5, subsection 3, would merely specify that the prevailing wage provisions applied to all job order contracting. The amendment would delete subsections "c" and "d" of Section 8, subsection 1, which made reference to non-prevailing wage bidding. That reference, he explained, was included in the original draft by inadvertence. The state law, as it stood, permitted jobs under $100,000 not to be covered under the prevailing wage provision; however, Mr. Brown stated, they did not wish that to apply in this instance. At Section 10, subsection 6, the amendment changed the amount from $500,000 to $250,000.
Mr. Brown explained that he had spoken with Clark County School District and they were in favor of this bill because it represented another tool at their disposal to get construction projects done in a timely manner. Support, he noted, had been received from other entities, who would testify in favor of A.B. 167. He offered to answer any questions.
Chairman Goldwater asked if there were any questions for Mr. Brown. Assemblywoman Giunchigliani asked for an example of what would constitute a small project. Mr. Brown stated he had met with the Director of Construction for Clark County School District and was shown a list of small projects, mostly concrete flat work, that totaled approximately $150,000 to $200,000. The concrete work appeared to be the major work on that list. Ms. Giunchigliani stated she was still unclear; she recognized the dollar amounts but wondered what types of jobs would be affected. Mr. Brown stated that Mr. Brower and Mr. Mellon would be able to explain.
Gregory A. Brower, Legislative Advocate, representing The Gordian Group, introduced Harry H. Mellon of The Gordian Group. Mr. Brower stated that Mr. Mellon had retired from the U.S. Army several years ago as a colonel and had been the chief engineer for NATO in Europe. In that capacity, Mr. Brower explained, Mr. Mellon invented and pioneered this "job order contracting" process. In the private sector he had consulted with local governments and state governments around the country to implement his job contracting process and had been approached by the Clark County School District. Mr. Brower explained that Mr. Mellon would be better able to explain the types of contracts and answer their questions.
Mr. Mellon stated he was the Chief Executive Officer of The Gordian Group. Clark County School District had selected The Gordian Group through a competitive process to assist them in developing the job order contracting process. This process was a competitively bid contract awarded to construction contractors to perform small and medium size projects that would occur in the maintenance, repair, and minor new construction of facilities. He explained that his group had a great deal of experience with this process with school districts throughout the country and were successful in saving time and money. A catalog was developed by the public agency, in this case, the Clark County School District, and it would contain the various construction tasks that the School District hoped to have performed under this contract. He distributed two handouts, "Job Order Contracting" (Exhibit D) and "Information Handbook" (Exhibit E). At tab number 5 of Exhibit E, he noted, was a sample of a catalog listing the types of items that would be included in the catalog. Each item had a description and two prices, a price to install the item and a price to demolish the item. Mr. Mellon explained that the Clark County School District would develop the tasks and the pricing of those tasks. The pricing would be direct cost only, which included equipment, material and labor. No profit or overhead would be in those prices. The concept was to take this catalog and put it out for competitive bid to the contracting community and to explain to that community that those were the tasks that needed to be done over a period of time, typically one year. The School District would ask the contractors to bid their adjustments to those published prices.
Mr. Mellon explained that contractors usually bid two adjustments, one if they were asked to do the work during normal business hours and another for work during other than normal business hours. A markup of 15 percent would be bid at 1.15. If a contractor wanted a 7 percent markup over the prices they would bid a 1.07. The contract would be awarded to the contractor that bid the lowest two factors. Those prices were then fixed for the first year of the contract. At any time during that year the School District could order any of those tasks out of the catalog for the price published in the catalog multiplied by one of those two factors.
Assemblywoman Giunchigliani thanked Mr. Mellon, stating his explanation helped her get a better picture. She asked how Gordian Group made its money. Mr. Mellon answered that their sole business focus was to help public agencies. They were a professional services firm and they prepared all the documents and took responsibility for developing the catalog, the tasks, and the pricing. He stated they worked with legal teams to develop the bid documents that would accompany the contract. Mr. Mellon explained they helped the School District develop the procedures by which the process would be used, what paperwork would be generated, who would review it, and who would sign it. He said they oversaw the whole bureaucratic process.
Ms. Giunchigliani asked Mr. Mellon if his company had been selected through an open bid and Mr. Mellon stated they had. She asked how many other groups had bid on this and Mr. Mellon did not know. She then asked if The Gordian Group received a flat dollar amount or a percentage. Mr. Mellon explained that their proposed fee with the Clark County School District was that his company would take 100 percent of the risk and the cost to get the process in place. If it worked, they would be paid a licensing fee for the use of his documents and software that would be provided to the School District and maintained for them. At any time, he explained, if the process did not work, the School District could stop using it and not owe them anything. Ms. Giunchigliani asked if The Gordian Group were a "middle man," and a fee would have to be paid to somebody to be able to do what the School District used to do "in-house." Mr. Mellon disagreed; their company was a professional services firm, like an architectural-engineering firm. Currently, Mr. Mellon said, they hired architectural-engineering firms to develop documents for them; they put those documents out to bid and managed the construction themselves. His company was very much like that in that they produced the front-end contractual documents. He reiterated that his firm was not a "middle man" at all, just a professional services firm providing the documents and software that would allow the School District to use this job contracting process. Mr. Giunchigliani stated that she did not recall this ever being an issue with the Clark County School District. She asked whether they were using bonding capacity dollars for this program to be put into place or General Fund monies. She added that he probably did not know the answer so she would research further. He stated he did not know, but the School District was interested in implementing this process because of the company's results with the New York City Board of Education. Over the five years that the process had been in place in New York, they had accomplished over $115 million in work and over 6,000 projects from which there had not arisen one claim, dispute, lawsuit, or protest.
Assemblywoman Giunchigliani stated that if she looked at Exhibit E, Section 09110, under tab 5 at page 5.10, the work proposed were jobs she had done as a classroom teacher, and she wondered if many of those tasks might not be general maintenance work for which the school district was already paying. Mr. Mellon stated that she needed to look at the catalog as a box of "Lego" blocks. Using the catalog, the project would be completed. Ms. Giunchigliani stated that was the process that was now happening and wondered how the savings would come into play. Mr. Mellon stated that normally the School District would have to hire an architectural engineering firm to design a project at a cost of 7 to 10 percent of the cost of construction; then they would put that contact out for bid; they would select a potential bidder; they would need to get board approval of that contractor and get that contractor mobilized. For a $100,000 project, it would take the District 6 to 9 months to go through that lead process. With job order contracting, Mr. Mellon stated, the average time would be 28 days. That savings in time and money generally averaged 15 percent of the construction cost.
Ms. Giunchigliani asked whether there would be a different price list for those projects that would be done on weekends or after school hours. Mr. Mellon stated it would be the same price list; it would be bid differently, with a price adjustment. The contractor would bid two numbers to cover the different times. The School District would pay the factor that applied to when the work was being done.
Chairman Goldwater asked if there were other questions from the Committee. Assemblywoman Buckley asked about the competitive bidding process in which The Gordian Group had received its contract with the Clark County School District. How many companies, she asked, did the same type of work as The Gordian Group and how many bid when they were awarded the contract. Mr. Mellon stated he did not know how many had bid. Approximately 95 percent of the time The Gordian Group had been selected, their selection had been through the competitive bidding process and had been based on their qualifications. They had been awarded some sole-source contracts, he noted, but not often. There might be three or four other competitors bidding at the same time. Ms. Buckley asked if there were any Nevada companies doing this type of work, and Mr. Mellon stated he was unaware of any. He stated, however, that he was a Nevada resident.
Chairman Goldwater asked what quality control existed to ascertain that the work that had been ordered and paid for had been done satisfactorily. Mr. Mellon stated that the work was inspected the same as normal construction would be by the Clark County School District. The advantage of job order contracting was that the contractor who was awarded the contract, which initially totaled $50,000, could, over time, go up to $2 million or more. In order for the contractor to get the next job, they had to have performed satisfactorily. Chairman Goldwater asked about adequate bonding and Mr. Mellon stated that all the work was 100 percent bonded. Chairman Goldwater asked if they would be paying prevailing wages on those jobs and Assemblyman Brown stated that, because of the amendments he had proposed, they would be. Mr. Brown continued that there were actually four bid adjustments to every contract, two for prevailing wage, one regular time, and one overtime or weekend, and two for non-prevailing wage. Traditionally, Mr. Brown noted, jobs under $100,000 did not require prevailing wage. It was not their intention to eliminate the prevailing wage provisions.
Chairman Goldwater asked Mr. Mellon to tell the Committee about the New York program. Mr. Mellon said their program was being used by the City of New York and the New York City Department of Education. Chairman Goldwater asked what the labor force consisted of for those jobs; were they a well-trained labor force or were they "thrown together" for the job. Mr. Mellon stated that general contractors typically bid those contracts out to subcontractors. He stated that small local emerging businesses were awarded more work than they would normally receive under the traditional bid process. The general contractors spread the work out to more small local businesses.
Chairman Goldwater asked if there were other questions from the Committee and there were none. Assemblyman Brown stated that they had received a proposed amendment from the Nevada State Education Association. The amendment stated the intent of the bill was not to reduce or eliminate existing positions among the employees of the District.
Chairman Goldwater thanked the speakers. He asked for other speakers who were proponents of A.B.167, and there were none. He asked for opponents to testify next.
Mark Sullivan, Legislative Advocate, representing Associated General Contractors, Nevada Chapter, stated he had met with the proponents of this bill as well as some contractors and although this was a pilot program, they had several concerns about the bill. Assemblywoman Giunchigliani had addressed one concern, which was where the savings could be found. Currently, the School District had the ability to do a large portion of what this bill was proposing without the use of a "middle man." He believed there could be some adverse effect on prevailing wage provisions and it could hurt some small emerging contractors because A.B. 167 could allow up to $5 million worth of work. The one-year contracts referred to in their testimony actually had options for four more years. Mr. Sullivan stated there could also be adverse effects on apprenticeship and training. He thought the next speaker could explain to the Committee how it would affect his company.
Sean Madole, Project Manager, Valley Hoe, voiced his concern with the bill. As a small contractor, he explained, he was concerned about "bundling" jobs. He explained bundling was when multiple small contracts were bundled into larger contracts. The opportunity by smaller contractors to bid on those jobs would be lost. Since this was all bonded work, he would be unable to obtain a bond for the possible $5 million total of the contract. He would be frozen out of the process to bid on those contracts. Fewer contractors able to bid meant less opportunity for local, smaller contractors to obtain the contract. Mr. Madole also had concerns about the possible cost savings because reduced competition did not result in lower prices.
Mr. Sullivan wanted to tell the Committee that the Nevada Department of Transportation (NDOT) had approached the AGC (Associated General Contractors) because disadvantaged business owners, small business enterprises, and minority contractors were currently having problems getting work. He explained that those smaller contracts were where the smaller contractors received their first chance to work in the public works arena.
Richard Daly, Business Manager, Laborers Local Union No. 169, stated he understood this bill applied to only the Clark County School District, but they had concerns regarding Section 9(b), which stated, "each contract would have a minimum dollar amount" and 9(c), which spoke of a maximum dollar amount, not to exceed $5,000,000. A.B. 167 stated that $250,000 was the contract limit. He did not understand how one contractor could bid on one $250,000 job and have that contractor perform $5,000,000 worth of work. He felt it would eliminate competition.
Mr. Daly also had concerns with Section 8, subsection 2, which stated "A contractor who submits a bid on an indefinite quantity contract is not required to submit the information described in NRS 338.141 with his bid." That provision dealt with subcontracting. He stated that if he were awarded a contract to plant trees at $100 per tree, for instance, he could subcontract that work and pay that subcontractor $25 per tree. He asked whether worker's compensation would cover that subcontractor and how they would turn in certified payroll reports. He suggested the whole process seemed ridden with problems.
Assemblyman Brown commented that the concerns about "bundling" by several witnesses was covered on page 5, line 43, which stated that the Clark County School District would not "divide a public work into separate portions to avoid the requirements of paragraph (a)." That paragraph limited the work to $250,000. A $5 million contract would not be allowed under A.B. 167; the most that would be allowed for a single individual project was $250,000.
Lori Ashton, Southwest Regional Council of Carpenters, wished to be on the record in opposition to this bill. In developing the catalog, Ms. Ashton asked, who would make the determination of the classifications of the workers who would perform those tasks. She asked who would monitor and be sure that the proper classification of workers and the proper wage rates were being applied. There appeared to be, she stated, many flaws to this bill.
Al Bellister, Director of Research, Nevada State Education Association (NSEA), distributed an amendment (Exhibit F) to A.B. 167. His group represented the support personnel in the Clark County School District, the people who routinely performed the work identified in the bill. They were painters and maintenance workers and, they were concerned that the people employed by the Clark County School District who currently did that work would be protected. He asked if John Lynch or Dale Oberhaus in Las Vegas were present to testify.
Ernest Dale Oberhaus stated he spoke for the maintenance personnel and the employees of Clark County School District. They were opposed to A.B. 167 because other maintenance contracts would be awarded, thereby eliminating some of their jobs.
Chairman Goldwater thanked Mr. Oberhaus for his testimony and asked if there were any questions; there were none.
Steve Holloway, Associated General Contractors (AGC), apologized to the Committee. He wished to speak in favor of A.B. 167. He explained that the AGC had been working for two years with the Clark County School District in an effort to expedite the procedures. He said he would like to see this program on a trial basis because it would use prevailing wage rate on jobs that currently did not use prevailing wages and secondly, work that was not now competitively bid would be competitively bid. Mr. Holloway stated AGC was in favor of this pilot program.
Danny Thompson, Executive Secretary/Treasurer, AFL-CIO Nevada, stated the Government Affairs Committee had "killed" the exact same bill during the last session. The reason had been mostly concerning the same issues they had discussed. The enforcement of prevailing wage provisions was a big concern of theirs. The Clark County School District, he stated, had a history of not paying prevailing wages. There had been an incident where workers had been forced to pay "kickbacks" to the contractors on the job. He understood this was a pilot project but objected to the injection of a "middleman" into the process. He said the middleman would have to make some money somehow.
Chairman Goldwater asked if there were questions of Mr. Thompson. Assemblywoman Buckley asked Mr. Thompson if, for instance, it were permissible to group jobs for a calendar year, and those jobs would be paid at the prevailing wage and the only purpose was to keep the paperwork down, would it not be a good thing as long as the same protections were in place. Mr. Thompson stated it could save on paperwork; his concern was with the compliance of paying prevailing wages. He felt there was not much money in that paperwork when it came to the cost of school construction.
Greg Smith, Administrator, Operating Engineers, Joint Apprenticeship Committee for Northern Nevada, had a question concerning the catalog to price tasks. Did that pricing of tasks include any kind of training or apprenticeship, he asked. If cost were the issue, he stated, the first thing that would go would be apprenticeship and training. If the building trades did not train for the future, there would not be a future for the building trades.
David Kersh, Government Affairs Representative, Carpenters/Contractors Cooperation Committee, Inc., stated they were opposed to A.B. 167 for all the previously mentioned reasons but wished to add one thing regarding the prequalification process. If the indefinite contract could be extended for another year, it appeared that it circumvented the prequalification process. It appeared, he stated, that one would prequalify a contractor and then not have to go through the prequalification process again the next year. He felt that was unfair.
Chairman Goldwater stated he saw no middle ground between the proponents and opponents and asked Mr. Brower to provide the Committee an outline to answer some of the objections. He asked Mr. Thompson and Mr. Daly to provide the Committee with an outline of their specific objections to the bill.
Mr. Brower stated some interesting questions had been raised and he was willing to work with Assemblyman Brown to put together a question and answer list. Chairman Goldwater noted it would be appreciated.
Chairman Goldwater closed the hearing on A.B. 167 and opened the hearing on A.B. 282.
Assembly Bill 282: Requires that bidder participate in certain programs of training and apprenticeship to be qualified to bid on public works projects. (BDR 28-727)
Chairman Goldwater explained that this bill required the bidder to participate in programs of training and apprenticeship.
Assemblywoman Giunchigliani, District No. 9, Clark County, introduced the bill. This bill, she stated, inserted language throughout NRS 610, changing it from "may" to "must" regarding what the Apprenticeship Council should do in the cases of public works projects, as well as in projects that local governments would be bidding on. The "may" sections, she noted, currently allowed for them to have apprenticeship training, but this change would require it. The purpose was to expand job training, jobs, women and minority inclusion. The bill attempted to empower the state Apprenticeship Council.
In addition, Ms. Giunchigliani stated, as she reviewed NRS 610, she came across a passage that might cover any opposition to this bill. She noted the Labor Commissioner currently appointed state councils, and the Labor Commissioner was an ex-officio member of that Council. Since the Council's decisions were appealed to the Labor Commissioner, it appeared that the proper authority did not exist. If there was a willingness to move forward on this bill, she suggested that a work session be established and an amendment be made to change the appointment from the Labor Commissioner to the Governor to make the appeal process cleaner.
Chairman Goldwater asked Ms. Giunchigliani if she thought there would be a need for a formal subcommittee; she stated she felt informal meetings could handle the matter. Chairman Goldwater asked if there were questions for Ms. Giunchigliani.
Chairman Goldwater asked for proponents to testify. Lori Ashton commended Ms. Giunchigliani for trying to bring this bill forward. When one looked at public works and the argument of the expense of building public works through prevailing wage, if all contractors were required to utilize an apprenticeship program, there would be dollar value savings. She stated it was a beneficial bill.
John Simmons, Construction Manager, Public Works, City of Henderson, stated he had not initially planned on speaking about A.B. 282, but that he would like to put on the record that this bill would require that bids only be accepted from contractors who participated in a state-approved apprenticeship program. The proposed changes in A.B. 295, he noted, were preferable to those changes in A.B. 282. The problem with the wording in A.B. 282 was that it also applied to projects with estimated costs between $25,000 and $100,000. The City of Henderson was required to maintain a list of contractors for that size project. This change would severely limit their choice of contractors, especially with electronic communications installation, which was currently not registered with the State Apprenticeship Council. There were no provisions in the bill that dealt with that situation.
Assemblywoman Giunchigliani asked Mr. Simmons what language in which bill he preferred; he preferred A.B. 295. She asked which sections he referred to; did it only include those sections regarding bidding for the local governments. Mr. Simmons concurred. Ms. Giunchigliani asked Mr. Simmons if he knew to which committee A.B. 295 had been assigned and he stated he did not know.
Jack Jeffrey, Legislative Advocate, representing Southern Nevada Building and Construction Trades Council, stated they were generally in favor of the bill but had some concerns and would like the opportunity to work with the sponsor of the legislation to work out the details. Apprenticeship training, he stated, was important.
Steve Holloway, Executive Vice President, Associated General Contractors, Las Vegas Chapter, stated they would like to support this bill, but, there was one drawback; it would eliminate over half of the competitive bidders on public works projects throughout the state. In some areas, he stated, there was a scarcity of bidders at the present time, since most nonunion companies did not have a formal apprenticeship training program, much less a state-certified program. He applauded the intent of the bill but felt it would have a costly and negative effect on state government.
Chairman Goldwater asked Mr. Holloway to work with Ms. Giunchigliani on the bill.
James E. Keenan, Nevada Public Purchasing Study Commission, stated that the Commission supported training and apprenticeship, but he expressed their concern that, from a purchasing standpoint, this bill would severely restrict the number of bidders that could bid on competitive bidding projects. He distributed a two-page document to the Committee (Exhibit G). He stated this would be antithetical to good procurement practices and even, in some cases, contract and case law that required maximum competitive bidding. He had been given a figure that indicated approximately 70 percent of the contractors in the state of Nevada might not be able to bid on public works contracts under this bill. That would seriously affect competitive bidding and it would be an economic certainty that the lack of competitive bidding would raise prices on projects. Any effort, he stated, that eliminated or reduced the opportunity for competitive bidding should raise concerns. It would place inordinate and unnecessary investigative and verification burdens on the public purchasing manager, he stated. It would require the person responsible for awarding the contract to determine that the bidder did not participate in an apprenticeship program. That should not be a function of the purchasing manager. In addition, he noted, many public purchasing projects in the state of Nevada involved federal funds, and he felt it would violate good federal procurement practices and it might be prohibited under certain federal statutes. The way A.B. 282 was written, he explained, could adversely affect competitive public works bidding. His group would be willing to work with anyone to rectify those concerns.
Assemblywoman Giunchigliani asked Mr. Keenan if he would get her a copy of the federal statutes he referred to. She continued by asking if it were Mr. Keenan's testimony that the contractors who bid on public works projects did not bother to have apprenticeship programs. Mr. Keenan stated that was not his testimony; what he had said was this bill would impose a restriction on those contractors. Their interpretation of the bill, as written, was if a contractor were not enrolled in a state apprenticeship program, he could not bid and if he did, he had to be rejected. Ms. Giunchigliani again asked if those that could not bid did not bother to have an apprenticeship program. Mr. Keenan stated he did not know if they "bothered" to have one, or if they did not have apprentices; his only concern was that they did not have one. Ms. Giunchigliani asked if Mr. Keenan's group was made up of the local governments from southern Nevada. Mr. Keenan stated his group was statewide, public purchasing managers employed by public entities throughout the state. Ms. Giunchigliani stated they would get together.
Berlyn Miller, Legislative Advocate, representing the Nevada Contractors Association, stated they were supportive of A.B. 282 and the principles of that bill. Any effort, he stated, that would improve the education and quality of the workforce in Nevada would be worth pursuing. He explained he would be willing to work with the sponsor of the bill and the opponents to try to reach a compromise.
Chairman Goldwater asked if there were any other witnesses and there were none. Ms. Giunchigliani was directed to work with the parties to try to craft a workable bill. He closed the meeting on A.B. 282.
Chairman Goldwater opened the hearing on A.B. 393.
Assembly Bill 393: Revises provisions governing payments on public works. (BDR 28-996)
Chairman Goldwater stated that he was the sponsor of this bill. He had been approached by members of the Associated General Contractors to introduce this bill. Excessive funds were being withheld on their large public works projects. He asked Mr. Holloway to speak on this matter.
Steve Holloway, Executive Vice President, Associated General Contractors, Las Vegas Chapter, explained the purpose of the bill was to limit needless and dilatory withholdings of scheduled progress payments by public works agencies to a general contractor who must, in turn, pass those payments along to his subcontractors for payment of labor, materials, and equipment already expended or in place on a construction project. Those withholdings violated the intent and the spirit of NRS 338.515, 525, and 530, which consisted of "prompt payment in public works" legislation. Progress payments, he noted, were required to be paid when earned. The provisions of A.B. 393 were proposed in lieu of entitling the contractors on a public works project to stop work, which they could do on a private construction project, when payments were overdue. Mr. Holloway read from prepared testimony (Exhibit H).
Section 1, page 1, lines 3 to 6, simply allowed a public works agency to adjust the contract price during the term of the contract as a result of change orders approved by the responsible public body. Mr. Holloway wanted the Committee to note that the public body or its officers and agents initiated 99.9 percent of all change orders on a public works project.
Section 1, page 1, lines 7 to 12, subsection 2, prohibited a public works agency from withholding any portion except retention of a payment due a contractor for labor, materials and equipment already expended on a public works project. That expenditure, he stated, had to meet the contractual plans and specifications developed and approved by the public works agency and had to have been deemed satisfactory in accordance with NRS 338.515, 338.525, and 338.530.
Section 2, page 2, lines 1 to 5, was simply a conforming amendment.
Section 3, page 2, lines 6 to 24, was a section that limited the amount of retention that could be withheld upon satisfactory completion of the work on a public works project to 5 percent of the contract price or $50,000 whichever was less. The retention could be withheld until the construction project was satisfactorily completed and accepted by the public works agency. That would be the same percentage withheld by the public works project administered by NDOT. This was also the same retention allowed by regulation for the U.S. Army Corps of Engineers.
Section 3, page 2, lines 25 to 31, subsection 2 would allow a public works agency to reduce the amount of retention if the work in progress was satisfactory.
Section 3, page 3, line 32, subsection 3, was a conforming amendment, as were Section 3, page 3, line 1, subsection 4; Section 3, page 3, line 17, subsection 5; and Section 4, page 4, line 1.
Payment could still be withheld if a public works agency deemed the work to be unsatisfactory. Furthermore, Mr. Holloway stated, it allowed a public body to withhold any payment due the contractor and pay the Labor Commissioner instead if the Labor Commissioner believed that an employee had a valid and enforceable claim for wages. He also noted that every public works project was bonded. NRS required that the general contractor awarded a public works project had to provide a performance and payment security bond for 100 percent of the contract price. The general contractor might require that every subcontractor on the project provide a payment bond for the labor indebtedness that the subcontractors might incur. Those bonds would remain in effect for a year after the project had been satisfactorily completed. The 5 percent retention, he stated, was redundant and unnecessary, but A.B. 393 allowed such retention to insure that a public works project worked as intended. He stated that contractors were waiting to testify about public bodies who were currently withholding in the form of retention and other additional withholdings as much as 30 percent of the contract price. Those withholdings affected the contractors' ability to promptly pay his subcontractors for the labor, materials, and equipment expended on the public works project. Also waiting to testify, Mr. Holloway explained, was a representative of the Surety Association, who would testify that those practices were affecting the bonding capacity of contractors and their ability to bid on public works.
Chairman Goldwater asked if there were questions and there were none.
Mark Ireland, President of TAB Contractors, Inc., Las Vegas, stated his company performed work as both a general contractor and as a subcontractor. He stated his appreciation for the opportunity to speak in favor of A.B. 393. He gave an example of how the retention process worked; he did not use an actual project. A public agency awarded a contract for $30 million to construct a facility; the agency then withheld 10 percent of the value of each monthly payment. Once the project was 50 percent completed, the awarding agency, at its discretion, could forego withholding any additional retentions. At the 50 percent completion mark of this sample project, this would amount to $1.5 million that had been withheld in retention, even though there was a performance and payment bond provided for the project. On a project this size, Mr. Ireland explained, it would often take 12 months to 24 months for completion. The excessive retentions had an adverse effect on the cash flow of the contractors. The contractors were required to pay all their suppliers 100 percent of the invoiced amounts for materials delivered to the site. The agencies were only paying the contractors 90 percent. The contractors were being forced to finance the balance so that they could pay their suppliers. When this was added to the start-up withholdings, scheduled withholdings, submittal withholdings, operation and maintenance withholdings, performance test withholdings, mobilization payment restrictions, demobilization payment restrictions, and any other withholdings that could be inserted into the contract by the agencies, anywhere from 25 to 30 percent of the total contract amount could be withheld. On a $30 million dollar contract, $9 million could be withheld, and this amount needed to be financed by the contractors. Those withholdings, Mr. Ireland stated, affected the contractors' cash flow and their ability to pay suppliers, subcontractors, vendors, weekly payroll, and overhead expenses that they incurred in operating their business.
Mr. Ireland explained that bonding companies would look at the contractors' cash flow in evaluating the issuance of performance and payment bonds for contractors. Contractors, he noted, should not be forced to finance public works projects, especially since there were performance and payment bonds in place.
Chairman Goldwater asked Mr. Ireland if wage claims were paid out of the retention. Mr. Ireland stated that they were not paid out of the retention; he understood that the surety bonds would cover wage claims. Steve Holloway remarked that wage claims were covered on page 3, paragraph 5, of A.B. 393. Money could be withheld from the contractor for wage claims.
Angela Ziel, Kaercher Insurance Agency, Inc., and Member, Board of Directors, Surety Association of Nevada, read from prepared testimony (Exhibit I). She stated they were in full support of A.B. 393. Her goal was to explain how excessive retentions and additional withholdings affected the contractors' ability to obtain surety bonds. She explained that the contractors were required to post performance and payment bonds. Those bonds were a guarantee that the contractor would perform his obligations under the contract. If the contractor failed to perform, the surety company would have several options. They could pay the public works agency the bond amount, they could find another contractor to complete the work, or they could actually finance the contractor so that he would have enough funds to complete the project. She explained that the performance bond had a one-year standard maintenance guarantee, which would allow the public works agency to file a claim for faulty workmanship or materials found after the job was completed. The payment bond was a guarantee that the subcontractors, suppliers, and laborers would be paid.
Ms. Ziel explained that because the surety was more like an extension of credit, one could not just buy a bond. There were qualifications in order to obtain a bond. She stated that the bonding company would look at a contractor's character, his capability and his capacity, or his financial strength. It was the contractor's capacity that was mostly affected by the excessive retentions. One of the factors the surety company would look at was backlog. The larger the backlog, the smaller the bond limit that the surety would assign. The surety company also looked at working capital. Because suppliers needed to be paid before the contractor would be paid, the contractors had to use the funds they had in their accounts or borrow against bank lines of credit. All those factors affected the surety company's willingness to issue a bond. Many contractors had stopped bidding on public works projects because of their inability to obtain a surety bond.
Berlyn Miller stated the Nevada Contractors Association was in support of A.B. 393. He explained that some of his clients had faxed letters to the Chairman: Las Vegas Paving Corporation (Exhibit J), Southern Nevada Paving, Inc. (Exhibit K), and MMC, Inc. (Exhibit L). The letters explained the effect of the excessive retentions on those contractors. The retentions, Mr. Miller explained, could far exceed the contractors' profit, and it might be many months after the completion of the job before the contractor would receive the last of his money from these projects. He urged the Committee to pass this bill.
Mr. Miller noted that NDOT had a policy in place under which they had had no problems and saw no reason to withhold additional funds.
Chairman Goldwater thanked the witness and asked if there were questions.
Assemblyman Beers asked Mr. Ireland to explain the cumulative, multiple sources of retention that would total more than a reasonable retention rate. Mr. Ireland explained that additional withholdings could be written into the contract. Those amounts were above and beyond the retention. By the time those were added in, Mr. Ireland explained, the amount would have increased.
Mr. Holloway added to Mr. Ireland's response by giving one example. One agency withheld, in addition to retention, 20 percent of the cost of the equipment that had been installed. That could amount to over half the cost of the project. Mr. Holloway explained that the equipment had been chosen by the agency, and the agency withheld that 20 percent under the mistaken theory that the contractor would have some leverage over the equipment manufacturer.
Chairman Goldwater asked if there were other speakers.
Fred J. Courrier, Reno Area Manager, Frehner Construction Company, Inc., only wished to add that his company was in support of A.B. 393. He stated he would be willing to relate any experiences his company had if the Committee wished to hear examples.
Chairman Goldwater thanked Mr. Courrier. Assemblyman Brown asked both Mr. Courrier and Mr. Holloway if, in order to release additional funding, one could go to the surety companies to have them sign off, and if those companies had been willing to do that on NDOT projects. Mr. Courrier stated that, in their experience, the sureties were willing to do that.
Assemblywoman Giunchigliani asked Mr. Holloway about page 3, paragraph 5, and if the wage claims were paid out of the other fund and not from the retention funds, but whether, under certain circumstances, that could happen. Mr. Holloway stated that a reduction in the amount of retention could affect wage claims, but only in very few cases. If the claim arose during the life of the contract, the money would come from the original sums that were owed the contractor, not from the retention funds.
Chairman Goldwater asked if there were other questions and there were none. He asked for any proponents for A.B. 393 who had something new to add, other than being on the record in support of the bill.
Ruedy Edgington, Assistant Director-Operations, Nevada Department of Transportation, stated that he had heard comments about the way NDOT operated and wanted to make it clear that they wished to be exempt from any provisions of this bill. Their system worked well with the contractors they used. The $50,000 per job retention could be increased, Mr. Edgington stated, but he did not want to fight that battle. He explained that on large projects, 5 percent or $50,000 was insufficient. They were pleased with the system as it was.
Assemblyman Beers noted that $50,000 on a $1 million job was well below 5 percent. Had NDOT been "burned," he asked. Mr. Edgington stated they had, but not often. At the end of a project, he stated, there would be an audit, and occasionally the contractor had been overpaid. Mr. Beers stated it appeared they had burned themselves and Mr. Edgington agreed. Mr. Beers asked if there were performance issues, and Mr. Edgington stated that the $50,000 retention was enough to complete the job.
Jack Jeffrey stated the Southern Nevada Building and Construction Trades Council was opposed to A.B. 393. He wanted the Committee to know that wage claims had been paid out of the retention funds. He disclosed to the Committee that he also represented the Southern Nevada Water Authority, but he was not testifying on their behalf with regard to this bill, but on behalf of the Southern Nevada Building and Construction Trades Council. He gave examples of how wage claims had often been handled without the use of retention funds. He stated that $50,000 would not come close to covering the claims he had seen in the past. It would not take long, in larger projects, to exceed the $50,000 retention amount. His concern was if the $50,000 would be enough in retention to take care of those problems.
Mr. Jeffrey stated he had spoken to contractors in southern Nevada to see what amounts were retained on private projects and was told they retained about 10 percent.
James Bell, Public Works Director, City of North Las Vegas, stated they appreciated the issues the AGC faced, but he wondered if there were not other ways to address those financing problems. To use NDOT as an example, he stated, was wrong because of the way they priced their projects. A solution needed to be found that resolved all kinds of problems. Financial guarantees were important, he explained. The issue seemed to be whether 10 percent was a fair retention. Could there be a reduced number, he wondered. Mr. Bell remarked about the surety company's concerns and felt that perhaps there should be a "no fault" insurance provision. Overall, they were opposed to A.B. 393, but they would like to see modifications that would be fair to all parties.
Chairman Goldwater stated those were excellent suggestions and he would like to see all the parties meet and confer to craft a bill that would relieve the contractors while protecting the public.
Marcus R. Jensen, Director of Engineering, Southern Nevada Water Authority, spoke from prepared testimony (Exhibit M). He stated that the bill would severely reduce the protection afforded the public from potential economic losses on public works projects. The Water Authority, he stated, had considerable experience with construction projects and since 1995 had been involved in a $2 billion capital improvements project. Over 70 of the 100 projects scheduled had been constructed. Mr. Jensen wanted to rebut the statement he had heard from previous testimony; his agency was in full compliance with the Prompt Pay Act.
Mr. Jensen explained the purpose of retention and how it was a standard practice in both the public and private construction industry. He noted that by law, public agencies had to pay interest to contractors on all money that had been retained. Retention protected the public agency from a variety of problems.
Chairman Goldwater asked if Mr. Jensen could shorten his testimony, as time was running short and the Committee members needed to be down on the Floor for a scheduled Floor Session. He stated the Committee understood the basis for his opposition to A.B. 393. Chairman Goldwater asked if there was any room for negotiation.
Mr. Jensen stated he wanted to make one important point. There was a significant difference between bonds and retention. Bonds would not provide the same area of protection as retention. Bonds were called when a default occurred; they were not useful or intended to compel correction of defective work. He stated there was some misunderstanding with contractors regarding the contractual withholdings versus non-payment for work that had not been performed. Mr. Ireland had enumerated a long list of withholdings; those amounts were in fact not withholdings, Mr. Jensen stated. They were monies that had been designated in the contract to be paid after the work was performed. If the work had not been performed, the contractor should not be paid for that work.
Mr. Jensen stated they believed that lowering retention rates and prohibiting deductions would drastically reduce the protection afforded the public.
Chairman Goldwater thanked the speaker.
Brent C. Moser, Principal Civil Engineer, Construction Management Supervisor, Clark County Water Reclamation District, read from prepared testimony (Exhibit N). His District was very concerned about the consequences of A.B. 393. Generally, they opposed this bill. The majority of the projects they constructed contained very expensive and complex wastewater treatment plant equipment with intricate instrumentation and control devices. The normal project would cost $30 million and contain $10 million to $15 million of equipment. During the final days of a project, Mr. Moser explained, was when the contractors were in the process of proving that the equipment and devices operated as they were intended. There was always a large list of "punch list" items at the end of a project. He listed some end of the project problems that could arise and stated that $50,000 would not cover those problems. A.B. 393 would put the public agency in a precarious and vulnerable position. The District, Mr. Moser stated, was willing to sit down with all concerned parties to work out a reasonable solution, but urged that the bill, as written, not become the solution.
John Simmons, Construction Manager, Public Works, City of Henderson, read from prepared testimony (Exhibit O) and stated that the City of Henderson typically paid the retention after 50 percent of the project had been completed, provided that the schedule was on time, there were no outstanding prevailing wage rate issues, and there were no late or outstanding payments to major subcontractors. If A.B. 393 were passed, it would take away their ability to effectively manage their projects. He spoke of projects that were ongoing at this time. Chairman Goldwater stated that the bill would not be passed in its current form and they would try to fix it. Mr. Simmons stated that the prevailing wage claim penalties were taken from retention funds, not surety bonds. He asked that his written testimony be included in the record.
James Keenan, Nevada Public Purchasing Study Commission, distributed a two-page document (Exhibit P) to become part of the record.
Chairman Goldwater stated they would be working on this bill. He asked if there were other witnesses who wished to speak and there were none. He closed the hearing on A.B. 393.
Chairman Goldwater opened the hearing on A.B. 424.
Assembly Bill 424: Revises provisions relating to public works and state purchasing. (BDR 28-959)
The sponsor of this bill was not present so the bill was not heard.
Chairman Goldwater closed the hearing on A.B. 424 and opened the hearing on A.B. 425.
Assembly Bill 425: Revises provisions regarding public works. (BDR 28-405)
Assemblyman David Parks, District No. 41, Clark County, introduced A.B. 425. He explained that this bill was a "cleanup" bill. There was a broad consensus by local purchasing agencies as well as contractors and others in the construction industry. Many sections of NRS 338 had been amended over the years, resulting in a "disjointed" chapter. A.B. 425 updated terminology and standardized many terms. Mr. Parks stated that also present were members of the Nevada Public Purchasing Study Commission, who would testify in favor of this bill.
Ted J. Olivas, Assistant Director, Clark County Finance Department, and Chairman, Nevada Public Purchasing Study Commission, explained that the Commission had been established in 1975 through NRS 332.215 to look at legislation and identify ways of making the laws easier to follow. During the last session a cleanup bill was done for NRS 332, which was the purchasing process used by local governments for goods and services. A.B. 425, he stated, was their attempt to do a similar process for NRS 338. He distributed a three-page proposed amendment (Exhibit Q), and asked that a work session be utilized to rectify some of their concerns with the drafting of the bill. Also distributed was a two-page document from Jim Keenan (Exhibit R), which also showed some proposed amendments.
Throughout the bill, Mr. Olivas stated, changes had been made in language such as "public body" and "awarding authority" so that the terms were consolidated. They wanted to look at some of the definitions provided in NRS 338 and consolidate them into one section. He told the Committee that he would not go "page by page." Most of it was cleanup wording for consistency.
Mr. Olivas stated there was a protest provision in the bill, which, in its current form, was inconsistent with NRS 333, and they had an amendment to fix that. The protest should happen, he explained, before the award of the contract; they were working with the Legislative Counsel Bureau (LCB) in that regard. There were minor changes requested by the State Public Works Board in the areas of landscape architecture, interior design, and residential design. Some wording had been added for exemption to NRS 338 particularly in the area of emergencies.
There were, Mr. Olivas stated, some minor changes to clarify the responsibilities for the new prevailing wage law that was recently passed which gave them some investigation responsibilities. This cleanup bill would allow them to collect costs associated with investigation costs when they investigated the claims that had been made. Currently, he stated, only the Labor Commissioner could recoup those costs. There were changes regarding advertising requirements and added criteria for local governments who chose to use prequalification that would include past performance to evaluate a bidder's responsibility. The state had the ability to look at a contractor's past performance, but that did not apply to local governments. Mr. Olivas also noted it changed the bidder's preference certificate submittal requirements. The certificate needed to be submitted with the bid document. They had been put in the position of having to reject bids because those certificates had not been attached. If the contractor had a valid certificate when they submitted their bid, the local government could get a copy of it later.
Also included in this bill was a new subcontractor listing provision. The law currently required a 1 percent list and a 5 percent list, and this bill would add an alternate method that allowed the jurisdiction to list those contractors that they felt would make up 3 percent or more of the work. That would be placed in the bid document and the contractor would merely fill in the blanks for them and tell them who would be doing that work. The lists received from the general contractors, Mr. Olivas said, never matched, and it led to potential protests. He stated that there were many areas that were covered and felt that this bill would be beneficial to all. He asked again that a work session be scheduled to work out any problems.
Ruedy Edgington, Assistant Director-Operations, Nevada Department of Transportation, stated that he was not really in opposition to A.B. 425; he believed that NDOT had a system in place that far exceeded what was being proposed in this bill. He asked that NDOT be exempt from this bill if it were passed. He distributed a one-page document (Exhibit S), which listed their standard specifications and discussed what NDOT did with a bid analysis team.
Chairman Goldwater asked Mr. Edgington to make his concerns known more formally to the bill's sponsor, Mr. Parks, and he agreed to do so.
Lori Ashton, Southwestern Regional Council of Carpenters, stated she had one comment concerning who had been contacted to assist in drafting this bill. No one, she stated, in the construction industry had been asked. Also, in Section 1, with regard to a 25 percent surety bond, she said that could mean posting a $10 million surety bond on a $40 million project. She felt that was excessive, among her other concerns, and she would like to work with the others in making some adjustments.
Chairman Goldwater stated she should work with Mr. Parks. He asked if anyone in Las Vegas wished to testify.
Jim Bell, Public Works Director, City of North Las Vegas, stated he wanted to applaud the work that had been done but had some concerns. As written on page 9, he stated, there were provisions that provided for the contractor to be able to be more punitive to the subcontractor than what had been the intent of the current statute. There would be some disadvantages built in, he explained. There did not appear to be a proportionate penalty. He was unclear what the proposed quarterly meetings would entail.
Chairman Goldwater asked if there was a representative from North Las Vegas on the Study Commission, and Mr. Olivas confirmed and added the person was Dwight Rawlinson. Chairman Goldwater asked if that were the person who had represented them on the Commission and asked if they had proposed any provisions in this bill. Mr. Olivas stated they had not.
Mr. Bell stated they were not opposing the bill, just noting that some points needed to be cleaned up. The stipulation of $100,000 should be revisited. It should, he felt, be a larger number.
Chairman Goldwater directed him to outline his points in writing and work with Mr. Parks. He asked if there was any more testimony and there was none. He closed the hearing on A.B. 425 and opened the hearing on A.B. 432.
Assembly Bill 432: Revises provisions concerning certain penalties against and withholdings of money from contractors and subcontractors on public works. (BDR 28-932)
Assemblyman David Brown, District No. 22, Clark County, introduced A.B. 432. This bill, he explained, was designed to correct a penalty that "did not fit the crime." The bill dealt with the forfeiture provision relative to public entities. Those entities withheld funds for certain violations under the prevailing wage statute.
NRS 338.060 permitted the public entity to withhold money
from a contractor and for that money to be forfeited in the amount of $20 to
$50 per worker per day under two circumstances. The first circumstance would be if the contractor
had paid less than the designated rate for any work done; secondly, if the
certified payroll report had not been provided in a timely manner. He did not want to deal with the penalty
assigned if a contractor did not pay or paid less than the designated
rate. The bill merely addressed the
failure to timely submit the certified payroll reports.
Mr. Brown gave an example of a general contractor on a public works project that had a subcontractor who had contracted to do $8,000 worth of work. The subcontractor came in and over a two-month billing period had three or four people on the project. It was a large project with a lot of paperwork, and the small subcontractor failed to submit the certified payroll report either to the general contractor or to the public entity. The oversight was discovered some 69 days later for one month's certified payroll and 99 days later for the prior month. The paperwork was quickly put together and it was submitted to the public body. At that time, the public body contacted the Labor Commissioner to determine what had to be withheld, and the amount was $23,400 in forfeitures. There was, Mr. Brown noted, no failure to correctly classify or categorize the employees, there was no failure to pay the appropriate prevailing wage. In essence, it was a "no harm, no foul" situation.
Mr. Brown stated he tried to create a bill that would keep in place the necessity of timely reporting without the onerous effect of a $23,000 forfeiture on an $8,000 contract. Mr. Brown noted another example where the forfeiture had been $180,000. What A.B. 432 proposed was a cap of $1,000 for the first failure to timely submit certified payroll reports and $5,000 for each subsequent failure on any particular project. Keeping the $20 to $50 per employee, per day regulation would, he stated, continue to impress the general contractor with the need for the timely filing of certified payroll reports.
The bill also stated that if a subcontractor had timely submitted his payroll report to the general contractor in sufficient time for that general contractor to submit it to the public entity, then the general contractor could not withhold from the subcontractor on the forfeiture.
Currently, Mr. Brown stated, the statute required that a public entity include a stipulation in the prime contract. This bill would address that point if the stipulation had not been included. That provision, he explained, was a separate provision not involved with the Labor Commissioner's ability to go after a contractor who failed to comply with any provisions of the prevailing wage statutes. If the untimely filing was merely an oversight, the penalty should not be so great as to put someone out of business. Mr. Brown stated that was the substance of the bill and he would be happy to answer any questions.
Terry Johnson, Labor Commissioner of the State of Nevada, stated he was in support of the bill and thanked the sponsor for bringing it forward. It was a matter that needed to be addressed, he stated. He had some areas of concern, and those concerns had been submitted to Mr. Brown in writing. He was in favor of the caps stated in the bill. Concerning the failure of the public bodies to include the stipulation, he had always held that position. Mr. Johnson wished to be on the record for a few items. The public body, he stated, had a legal obligation to include the stipulation in the contract and if they failed to do so, the public body could be penalized for the failure to do so.
Mr. Johnson did not want anyone to get the impression that because the public body had failed to include a prevailing wage stipulation in the contract, prevailing wages were not required to be paid. Prevailing wages would still be required even if the public body failed to include them in the contract. Overall, Mr. Johnson stated he supported the bill. He was concerned that the bill, as drafted, did not provide for a penalty for false certified payroll reports. He would like to work with the proponents to address his concerns.
Chairman Goldwater asked if there were any questions for Mr. Johnson and there were none.
John Simmons, Construction Manager, Public Works, City of Henderson, stated he was in favor of the bill. The limits proposed by this bill, he felt, were too low. Under this language a contractor could intentionally fail to submit any certified payroll reports until the end of the project and that would be considered a first offense. The new Section 3, he stated, seemed to be unnecessary, since the Labor Commissioner had already ruled under existing language that penalties might not be withheld if the express stipulation was not inserted in the contract. He believed the language should be clearer.
Chairman Goldwater asked if there were questions of Mr. Simmons and there were none. He asked if there were other supporters of the bill who wished to testify and there were none. He then asked for opponents of the bill.
Lori Ashton stated she was in the middle, not sure if she was totally opposed or not. She had concerns. Chairman Goldwater stated if she had concerns she should speak with Mr. Brown. Her concern, she stated, was the need to broaden the language.
Chairman Goldwater asked if there were any opponents and there were none. The hearing on A.B. 432 was closed and those people with questions were directed to speak with Mr. Brown to see if the questions could be answered and let the Chair know if questions had not been answered.
Chairman Goldwater stated there was one bill draft request that had been delivered to him regarding public works.
· BDR 28-556 – Makes various changes to provisions governing the recordation and taxation of property. (A.B. 534)
ASSEMBLYMAN HETTRICK MOVED FOR COMMITTEE INTRODUCTION OF BDR 28-556.
ASSEMBLYWOMAN BUCKLEY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Goldwater asked if there was any other business before the Committee and there was none. He told the Committee that a large number of bills had been referred to this Committee and implored the members to let the Chair know which should be heard and which should not. He noted that a subcommittee would meet following the adjournment of this meeting.
The meeting was adjourned at 4:33 p.m.
RESPECTFULLY SUBMITTED:
Patricia Blackburn
Committee Secretary
APPROVED BY:
Assemblyman David Goldwater, Chairman
DATE: