Bill Text: CA AB1574 | 2021-2022 | Regular Session | Amended
Bill Title: Public contracts: small business liaisons and advocates and disabled veteran business enterprises: preferences.
Spectrum: Committee Bill
Status: (Passed) 2021-10-09 - Chaptered by Secretary of State - Chapter 756, Statutes of 2021. [AB1574 Detail]
Download: California-2021-AB1574-Amended.html
Amended
IN
Senate
September 03, 2021 |
Amended
IN
Senate
June 18, 2021 |
Amended
IN
Senate
June 02, 2021 |
Amended
IN
Assembly
April 06, 2021 |
Amended
IN
Assembly
March 25, 2021 |
Introduced by Committee on Jobs, Economic Development, and the Economy |
March 04, 2021 |
LEGISLATIVE COUNSEL'S DIGEST
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
This act shall be known and may be cited as the Leveraging State Procurement for an Inclusive Economic Recovery Act of 2021.SEC. 2.
(a) California has a 30-year history of using state contracting to support business development within targeted business populations. Given the economic devastation as a result of the COVID-19 pandemic on small businesses, including veteran-owned businesses, it is important that the state aligns all of its resources to assist these businesses in recovery.SEC. 3.
Section 4532 of the Government Code is amended to read:4532.
As used in this chapter:SEC. 4.
Section 4533 of the Government Code is amended to read:4533.
(a) Whenever the state prepares a solicitation for a contract for goods in excess of one hundred thousand dollars ($100,000), except a contract in which the worksite is fixed by the provisions of the contract, the state shall award the following preferences:SEC. 5.
Section 4533.1 of the Government Code is amended to read:4533.1.
Where a bidder complies with the provisions of Section 4533 or 4534, or the worksite or worksites where at least 50 percent of the labor required to perform the contract is within commuting distance of a distressed area, the state shall award a 1-percent preference for bidders who certify under penalty of perjury to hire persons with high risk of unemployment equal to 5 to 9 percent of its workforce during the period of contract performance; a 2-percent preference for bidders who shall agree to hire persons with high risk of unemployment equal to 10 to 14 percent of its workforce during the period of contract performance; a 3-percent preference for bidders who shall agree to hire persons with high risk of unemployment equal to 15 to 19 percent of its workforce during the period of contract performance; and a 4-percent preference for bidders who shall agree to hire persons with high risk of unemployment equal to 20 or more percent of its workforce during the period of contract performance.SEC. 6.
Section 4534 of the Government Code is amended to read:4534.
(a) In evaluating proposals for contracts for services in excess of one hundred thousand dollars ($100,000), except a contract in which the worksite is fixed by the provisions of the contract, the state shall award the following preferences:SEC. 7.
Section 4535.2 of the Government Code is amended to read:4535.2.
(a) The maximum preference and incentive a bidder may be awarded pursuant to this chapter and any other provision of law shall be 15 percent. However, in no case shall the maximum preference and incentive cost for a single preference under this chapter exceed fifty thousand dollars ($50,000) for any bid, nor shall the combined cost of preferences and incentives granted pursuant to this chapter and any other provision of law exceed one hundred thousand dollars($100,000). In those cases where the 15-percent cumulated preference and incentive cost would exceed the one hundred thousand dollar ($100,000) maximum preference and incentive cost limit, the one hundred thousand dollar ($100,000) maximum preference and incentive cost limit shall apply.SEC. 8.
Section 12098.3 of the Government Code is amended to read:12098.3.
(a) The Small Business Advocate shall be appointed by, and shall serve at the pleasure of, the Governor.As used in this chapter:
(a)“Department” means the Department of General Services.
(b)“Director” means the Director of General Services.
(c)“Manufacturer” means a business that meets both of the following requirements:
(1)It is primarily engaged in the chemical or mechanical transformation of raw materials or processed substances into new products.
(2)It is classified between Codes 31 to 33, inclusive, of the North American Industry Classification System.
(d)(1)(A)“Small business” means an independently owned and operated business that is not dominant in its field of operation, the principal office of which is located in California, the officers of which are domiciled in California, and which, together with affiliates, has 100 or fewer employees, and average annual gross receipts of ten million dollars ($10,000,000) or less over the previous three years, or is a manufacturer, as defined in subdivision (c), with 100 or fewer employees. Commencing January 1, 2019, the average annual gross receipts threshold shall be fifteen million dollars ($15,000,000).
(B)For the purposes of public works contracts, as defined in Section 1101 of the Public Contract Code, and engineering contracts,
as described in Section 4525, for public works projects, awarded through competitive bids or otherwise, “small business” means an independently owned and operated business that is not dominant in its field of operation, the principal office of which is located in California, the officers of which are domiciled in California, and which, together with affiliates, has 200 or fewer employees, and average annual gross receipts of thirty-six million dollars ($36,000,000) or less over the previous three years. This subparagraph shall become operative on January 1, 2019.
(2)“Microbusiness” is a small business which, together with affiliates, has average annual gross receipts of two million five hundred thousand dollars ($2,500,000) or less over the previous three years, or is a manufacturer, as defined in subdivision (c), with 25 or fewer employees.
Commencing January 1, 2019, the average annual gross receipts threshold shall be five million dollars ($5,000,000).
(3)(A)The director shall conduct a biennial review of the average annual gross receipt levels specified in this subdivision and may adjust that level to reflect changes in the California Consumer Price Index for all items.
(B)Commencing January 1, 2019, the director shall conduct the biennial review and make that adjustment. To reflect unique variations or characteristics of different industries, the director may establish, to the extent necessary, either higher or lower qualifying standards than those specified in this subdivision, or alternative standards based on other applicable criteria.
(4)Standards applied under this subdivision shall be established by regulation, in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2, and shall preclude the qualification of businesses that are dominant in their industry. In addition, the standards shall provide that the certified small business or microbusiness shall provide goods or services that contribute to the fulfillment of the contract requirements by performing a commercially useful function, as defined below:
(A)A certified small business or microbusiness is deemed to perform a commercially useful function if the business does all of the following:
(i)Is responsible for the execution of a distinct element of the work of the contract.
(ii)Carries out its obligation by actually performing, managing, or supervising the work involved.
(iii)Performs work that is normal for its business services and functions.
(iv)Is responsible, with respect to products, inventories, materials, and supplies required for the contract, for negotiating price, determining quality and quantity, ordering, installing, if applicable, and making payment.
(v)Is not further subcontracting a portion of the work that is greater than that expected to be subcontracted by normal industry practices.
(B)A contractor, subcontractor, or supplier will not be considered
to perform a commercially useful function if the contractor’s, subcontractor’s, or supplier’s role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of small business or microbusiness participation.
(e)“Disabled veteran business enterprise” means an enterprise that has been certified as meeting the qualifications established by paragraph (7) of subdivision (b) of Section 999 of the Military and Veterans Code.
(f)“Limited contracting small business enterprise” means a certified small business, as defined in subdivision (d), that has received fewer than five public contracts from the contracting department in the previous two years or has received public contracts from the
contracting department totaling less than two hundred fifty thousand dollars ($250,000) in the previous two years.
(g)“New small business enterprise” means a certified small business, as defined in subdivision (d), that has not received a public contract from the contracting department in the previous two years.
SEC. 9.
Section 14838 of the Government Code is amended to read:14838.
In order to facilitate the participation of small business, including microbusiness, in the provision of goods, information technology, and services to the state, and in the(f)
(g)