At CASBO Con, Cindy Smith, partner at F3 Law, highlighted a significant shift in construction procurement for California school districts, alongside emerging legislative developments affecting transparency and administrative workload. Districts are navigating an increasingly complex legal environment:

“I do a lot of Public Records Act requests, and that is something that has exploded… including requests generated by AI.”

This growing pressure underscores the importance of staying current on both operational and legislative changes. One such change is AB 361, which introduces a new option for how districts can approach construction contracting.

A New Option: Best Value Contracting

On October 1, 2025, Governor Newsom signed Assembly Bill 361 (Chapter 144, Statutes of 2025), dramatically expanding the “best value” contracting authority that was previously limited to Los Angeles Unified School District (LAUSD). Effective January 1, 2026, most California K-12 school districts will be authorized to use a Best Value selection process for certain construction projects, a significant shift from traditional methods of procurement.

Under prior law, Public Contract Code Article 3.2 (commencing with § 20119.1) established a pilot program allowing only LAUSD to award contracts for construction projects exceeding $1 million based on “best value” rather than the lowest responsible bidder. That authority was set to sunset in 2025.

Why This Matters for School Business Leaders

AB 361 introduces a more flexible and strategic approach to procurement. Instead of awarding contracts solely based on lowest price, districts can now evaluate proposals based on a combination of price and qualifications.

As explained during the session:

“It provides another procurement option for school districts that utilizes a qualifications-plus-price analysis…determining who is the best contractor for a project.”

This shift is grounded in results seen from prior pilot programs:

• Fewer change orders
• Reduced project delays
• Fewer claims and disputes
• Increased participation from qualified contractors

For districts managing complex facilities projects, this approach can lead to better long-term outcomes and reduced risk.

Key Changes Under AB 361

• Best value authority now extends to all school districts (not just LAUSD) for projects exceeding $1 million
• Authorization runs through December 31, 2030
• Contractors must use a “skilled and trained workforce” unless a Project Labor Agreement applies
• Districts may consider objective criteria such as technical expertise, safety record, and life-cycle costs, rather than price alone
• Districts must submit an independent evaluation report on best value projects to the Legislature by January 1, 2030
• LAUSD’s authority is now permanent and no longer subject to sunset

Understanding “Best Value” in Practice

The law defines best value as the best combination of price and qualifications.

Districts evaluate contractors across five required qualification areas:

1. Financial condition
2. Relevant experience
3. Management competency
4. Labor compliance
5. Safety record

Importantly, the process requires a structured scoring methodology.

“The best value score is… when the district divides the bidder’s price by the bidder’s qualification score… the lowest score is the winning bid.”

This introduces a more data-driven, transparent selection process, but also adds complexity that districts must be prepared to manage.

Implementation Considerations

This legislation gives K-12 districts greater flexibility to select contractors based on overall value, experience, and quality, aligning their procurement options more closely with those of community college districts and state agencies.

Districts should work with counsel to update board policies, administrative regulations, RFPs, and contract templates to incorporate best value language and evaluation procedures before the law takes effect.

From a governance and operations standpoint, districts will need to:

• Adopt and publish a formal best value contracting policy
• Clearly define evaluation criteria and weighting in RFPs
• Ensure blind evaluation processes where required
• Train staff responsible for scoring and procurement
• Prepare for potential bid protests or challenges

It’s another option… not meant to replace hard bid or lease-leaseback, but to provide flexibility.

Broader Legislative Context: Rising Administrative Pressures

In addition to AB 361, the session highlighted AB 1821, a proposed bill addressing the surge in California Public Records Act (CPRA) requests.

“There is a proposed bill…attempting to address the proliferation of CPRA requests being submitted to school districts and other local agencies.”

The proposal would allow agencies to recover administrative costs under certain conditions and extend response timelines to business days. While still under consideration, it reflects a broader trend: increasing administrative demands on school business offices.

What CASBO Members Should Do Now

For Chief Business Officials and facilities leaders, AB 361 presents both opportunity and responsibility.

Immediate next steps:

• Assess which upcoming projects may benefit from a best value approach
• Collaborate with legal counsel to update procurement policies
• Begin internal discussions on evaluation criteria and scoring frameworks
• Train procurement and facilities teams on the new process
• Monitor legislative updates, including AB 1821 and related compliance impacts

About the Author

Cynthia Smith is a partner in F3 Law’s Sacramento office, where she advises school districts on governance, including the Brown Act, Public Records Act, and parliamentary procedure. She also counsels on contracts, facilities, and real property matters. With more than 20 years of experience in education law, Cindy is known for providing clear, practical guidance and frequently presents on governance and transparency.

F3 Law (Fagen Friedman & Fulfrost LLP) represents more than 500 of California’s educational institutions and related agencies. From bargaining to business and facilities, F3 provides comprehensive legal services. Districts across California rely on the firm’s expertise in labor and employment, business, real property, education technology and more.