The California Judicial Branch Contract Law (judicial contract law) went into effect in 2011. It generally requires all judicial branch entities to comply with the provisions of the Public Contract Code that are applicable to state agencies and departments and that relate to the procurement of goods and services. It also requires the Judicial Council of California (Judicial Council)—which is the policymaking body of the California court system responsible for ensuring the consistent, independent, impartial, and accessible administration of justice in the State—to create a contracting manual for all judicial branch entities, such as superior courts, and for these entities to adopt local contracting manuals.
The judicial contract law also imposes reporting requirements on judicial branch entities. Specifically, it requires that judicial branch entities notify the California State Auditor’s Office (State Auditor) within 10 business days of all contracts for goods and services they enter into that involve a total cost estimated at more than $1 million in value, with limited exceptions such as trial court construction contracts. The law further specifies that all administrative and information technology (IT) projects of the Judicial Council or the courts with a total cost estimated to exceed $5 million are exempt from this reporting requirement and shall be subject to the review of the California Department of Technology. The law also requires the Judicial Council to submit semiannual reports to the Legislature and the State Auditor containing specified information about most of the judicial branch’s contracting activities. The Judicial Council prepares the semiannual reports using information that judicial branch entities are responsible for providing to it.
In addition, and subject to legislative appropriation, the judicial contract law directs the State Auditor to audit judicial branch entities other than the Judicial Council every two years to assess their implementation of the judicial contract law. This is our fifth biennial audit report; in all, the five reports so far have covered procurement practices at 24 of the State’s 58 superior courts since the judicial contract law went into effect in 2011. For this audit, we selected the superior courts in the counties of Alameda, Contra Costa, Lake, Orange, and San Bernardino. We audited two of our selected entities—the superior courts in the counties of Alameda and Orange—previously, in 2014 and 2012, respectively. As state law requires, we based our selection of the courts we examined on factors including, but not limited to, each court’s size, total volume of contracts, previous audits or known deficiencies, and significant or unusual changes in management. Table 1 provides the relative size, workload data, and volume of expenditures of the five superior courts we selected for this audit.
The Five Courts We Reviewed Varied in Size, Workload, and Volume of Expenditures
|COUNTY SUPERIOR COURT|
|Alameda||Contra Costa||Lake||Orange||San Bernardino|
|Total expenditures, fiscal year 2019–20||$110,398,000||$62,951,000||$4,800,000||$207,031,000||$145,752,000|
|Total contract payments, fiscal year 2019–20||$19,196,000||$16,401,000||$1,675,000||$35,465,000||$25,920,000|
|Case filings, fiscal year 2018–19||224,000||112,000||10,000||410,000||287,000|
|Judges, total authorized positions as of June 30, 2019||73||38||4||127||73|
|Court employees, total authorized positions for fiscal year 2019–20||749||337||35||1,516||1,098|
Source: The Judicial Council’s 2020 Court Statistics Report; the Judicial Council’s Semiannual Report on Contracts for the Judicial Branch for July 1 through December 31, 2019, and for January 1 through June 30, 2020; and the superior courts’ budget reports for fiscal year 2019–20.
Note: Data in this table are unaudited and rounded.
The Judicial Branch Contracting Manual
The judicial contract law requires the provisions of the Judicial Branch Contracting Manual (judicial contracting manual) to be substantially similar to those of the State Administrative Manual and the State Contracting Manual and to be consistent with the Public Contract Code. The State Administrative Manual is a reference resource for statewide management policy, and the State Contracting Manual provides the policies, procedures, and guidelines to promote sound business decisions and practices in securing necessary services for the State. The Public Contract Code contains, among other provisions, competitive bidding requirements for public entities. Competitive bidding requirements help to provide all qualified bidders with a fair opportunity to enter the bidding process, and to eliminate favoritism, fraud, and corruption in the awarding of public contracts. In addition to establishing procurement requirements consistent with the law, the judicial contracting manual also contains recommended procurement practices for courts. Although those provisions are not mandatory, the judicial contracting manual favors the use of recommended practices unless courts have good business reasons for deviating from those recommendations.
Judicial Purchases That Can Be Exempt From Competitive Bidding Requirements
- Purchases under $10,000
- Emergency purchases
- Purchases from government entities
- Legal services
- Purchases through certain leveraged procurement agreements
- Purchases from business entities operating community‑based rehabilitation programs
- Licensing or proficiency testing examinations
- Purchases through local assistance contracts
- Sole-source purchases
- Purchases from certified small businesses
- Purchases from disabled veteran business enterprises
Source: State law and the judicial contracting manual.
Consistent with the Public Contract Code, the judicial contracting manual generally requires judicial branch entities to secure competitive bids or proposals for each contract, with certain exceptions, as the text box shows. For example, state law and the judicial contracting manual exempt purchases under $10,000 from competitive bidding requirements as long as a contracting entity determines that the price is fair and reasonable. State procurement rules and the judicial contracting manual also do not require competitive bids on contracts for emergency purchases or contracts with governmental entities.
The judicial contracting manual also allows several types of noncompetitive procurements. Two types that judicial branch entities can use are sole-source procurements and certain leveraged procurement agreements (leveraged agreements), including state leveraged agreements. The judicial contracting manual defines a sole-source procurement as one in which an entity affords only one vendor the opportunity to provide goods or services after the entity shows appropriate justification for doing so. An entity may use a leveraged agreement to purchase goods and services from certain vendors on the same or substantially similar contract terms as those negotiated by the State or another entity without having to seek competitive bids. The Department of General Services administers some leveraged agreements for use by state agencies and local governments so that they may buy directly from suppliers through existing state contracts and agreements. The judicial contracting manual includes a process for using leveraged agreements, but it recommends that judicial branch entities consider whether they can obtain better pricing or terms by negotiating directly with vendors or soliciting competitive bids.