California Assembly Bill AB361

California 2025-2026 Regular Session

• Introduced: 1/30/25
• Refer: 2/18/25
• Report Pass: 3/3/25
• Refer: 3/4/25
• Report Pass: 3/17/25
• Refer: 3/28/25
• Refer: 4/9/25
• Report Pass: 5/23/25
• Engrossed: 6/2/25
• Refer: 6/3/25
• Refer: 6/11/25
• Report Pass: 6/25/25
• Enrolled: 9/3/25
• Chaptered: 10/1/25
• Passed: 10/1/25

Caption

An act to amend Sections 20119, 20119.2, and 20119.3 of, to amend and renumber Section 20119.6 of, to add and repeal Article 3.4 (commencing with Section 20119.8) of Chapter 1 of Part 3 of Division 2 of, and to repeal Sections 20119.5 and 20119.7 of, the Public Contract Code, relating to best value procurement.

Summary

AB 361 expands California’s school district “best value” procurement framework for public works projects over $1 million. The bill makes permanent the existing Los Angeles Unified School District pilot authority to use best value procurement by removing the prior sunset and reporting repeal tied to that district’s program. It also creates a new, statewide temporary authorization allowing any school district other than LAUSD to use best value procurement through December 31, 2030, with the new article repealing on January 1, 2031. Under the bill, school districts that choose this method must adopt and publish fair and impartial bid-evaluation procedures. The best value process is based on objective criteria that weigh price together with bidder qualifications such as financial condition, relevant experience, management competency, labor compliance, and safety record. The bill also requires prequalification of bidders, sealed bids, and protections for subcontractors, and it limits retention withheld from contractors to 5 percent when a bond is required. In addition, bidders generally must commit to using a skilled and trained workforce, unless a project labor agreement or qualifying extension/renewal already covers that requirement. The bill’s main legal effect is to amend the Public Contract Code to broaden and standardize best value procurement authority for school construction and modernization projects. It adds a new article governing the process, defines key terms, sets bidding and scoring rules, and requires a one-time report to the Legislature by January 1, 2030 for districts using the new authority. It also repeals older sections that were tied to the prior LAUSD pilot structure and renumbers related provisions to fit the new framework. The overall sentiment reflected in the vote history appears favorable. The bill moved with strong majorities in committee and on the floor, including several unanimous or near-unanimous votes, suggesting broad legislative support for giving school districts more flexible procurement tools. The findings in the bill itself also point to a positive view of the policy, citing reported benefits such as fewer delays, fewer change orders, fewer claims, and improved contractor qualifications under best value procurement. The main points of contention are likely to have centered on the policy tradeoff between procurement flexibility and traditional low-bid contracting, as well as the labor-related requirements attached to best value awards. The bill preserves the lowest-responsible-bidder framework as the default unless a district opts into best value, but it also requires skilled-and-trained workforce commitments or project labor agreement coverage, which may have drawn concern from contractors or districts wary of added labor conditions. The reporting requirement and temporary sunset for the statewide program suggest lawmakers wanted some oversight and a chance to evaluate results before making the new authority permanent.

Impact

AB 361 amends the Public Contract Code to authorize school districts to use best value procurement for public projects over $1 million, while making LAUSD’s existing best value authority permanent and extending the model statewide on a temporary basis through January 1, 2031. It changes procurement rules for participating districts by establishing qualification-based bid evaluation standards, workforce and labor compliance requirements, subcontractor protections, retention limits, and reporting obligations, thereby creating an alternative to the traditional lowest-responsible-bidder process for school construction and modernization projects.

Sentiment

The bill appears to have enjoyed generally positive and bipartisan support. The vote history shows strong margins at multiple stages, with several committee and floor votes passing overwhelmingly and only a small number of dissenting votes. The bill’s findings also frame best value procurement as a successful tool that can reduce delays, claims, and change orders, reinforcing a favorable legislative sentiment toward expanding the option for school districts.

Contention

The likely areas of contention were the shift away from pure low-bid contracting and the labor conditions embedded in the best value process. Critics may have been concerned that qualification-based selection could reduce transparency or increase discretion, while supporters emphasized cost savings and improved project outcomes. The requirement that bidders commit to skilled and trained workforces, unless covered by a project labor agreement, is another potential flashpoint because it ties procurement eligibility to labor policy. The bill’s temporary statewide sunset and reporting requirement indicate that lawmakers wanted to monitor implementation before deciding whether to extend the authority further.