On September 18, 2026, Governor Newsom signed Senate Bill 1154 (Chapter 323, Statutes of 2026), extending “best value” contracting authority to California community college districts. Effective January 1, 2027, community college districts will have the option to use a best value selection process for certain public works projects exceeding $1 million, rather than awarding solely to the lowest responsible bidder.

SB 1154 follows closely on AB 361, which took effect January 1, 2026, and provided similar authority to K-12 school districts. Like AB 361, SB 1154 establishes an optional alternative procurement procedure that allows districts to consider both price and contractor qualifications when awarding eligible construction contracts. The new provisions are codified at Public Contract Code sections 20666 through 20666.5.

Key Changes Under SB 1154

• Best value authority extends to community college districts for public works projects exceeding $1 million through December 31, 2030.
• Districts must adopt and publish procedures and guidelines for evaluating bidder qualifications and conducting the best value selection process in a fair and impartial manner.
• Best value selections may consider qualifications including a bidder’s financial condition, relevant experience, management competency, labor compliance, and safety record, rather than price alone.
• Districts must prequalify bidders, and solicitations must identify the evaluation criteria, methodology or weighting system, and the relative importance assigned to those criteria.
• Contractors generally must commit to use a “skilled and trained workforce,” subject to specified exceptions for projects covered by qualifying project labor agreements.
• Districts using the authority must obtain an independent evaluation of their best value projects and submit a report to the Legislature by January 1, 2030. Multiple community college districts may jointly submit a single report.

Practical Impact

SB 1154 gives community college districts a new alternative to traditional low bid procurement for qualifying construction projects. Rather than awarding solely to the lowest responsible bidder, a district using the best value process may consider both price and specified contractor qualifications, including financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record, in determining which bidder offers the best overall value.

Community college districts interested in using this procurement method should consider developing the required procedures and guidelines and updating their bid documents and evaluation procedures before utilizing the new authority.

F3 Law is available to consult with its client community college districts regarding implementation of SB 1154. Please contact the authors listed below or the F3 attorney with whom you normally consult for more information.