PUBLIC CONTRACTS TARGETED STATE BILL WOULD MODIFY LOW-BID PRACTICE.

Byline: Brent Hopkins Staff Writer

Faced with opposition from both industry and government entities, the state Senate will consider a bill today that would modify governmental ability to contract with the private sector.

Introduced by Sen. Richard Alarcon, D-Van Nuys, and backed by the Service Employees International Union, Senate Bill 163 would hold general- law counties and cities to higher standards in awarding public contracts to the private sector. Under consideration by the Senate's Local Government Committee, the bill would force governments to demonstrate that the private contract would demonstrate overall cost savings.

``To merely grant contracts based on lower wages and benefits undercuts the whole civil service system,'' Alarcon said. ``My big concern is if we continue to allow for contracts to be given on the basis of lowest cost and a reduction of wages, all we're doing is creating a low-wage work force that has to be subsidized by other public entities.''

He argues that if a county or city sacks a department and subcontracts out to a low-wage, no-benefits private firm, the cost savings would be overrun by a greater burden on public health care and welfare, along with declines in consumer spending. But business leaders, the California State Association of Counties and the League of California Cities all oppose the bill, saying it would unnecessarily hamper governments with excessive red tape and choke off private contracts.

``It's bad, bad public policy,'' said Irwin Rosenberg, vice president of governmental relations for Laidlaw Transit Services and a board member of the Valley Industry and Commerce Association. ``States shouldn't be dictating to local governments in areas that should be under local control.''

The bill's union backers counter that the restrictions are already in place for school districts, community colleges and state contracts.

``These are the same standards the state has to follow when it contracts out, and we know it does millions and millions of dollars worth of business,'' said Michelle Castro, a legislative advocate with the SEIU's state council. ``If contractors already do business with the state, it doesn't seem like it would be impossible for a contractor to meet these standards.''

CSAC, which speaks on behalf of counties statewide, disagreed. Placing more restrictions on contractors would only tie the hands of government, according to CSAC legislative coordinator Steve Keil. Though he said it would only affect a few contracts statewide, CSAC wishes to prevent any waste of taxpayer dollars.

`'The statements (in the bill) are well-intended,'' Keil said. ``But they're overly restrictive.''