Bill Text: CA SB1219 | 2015-2016 | Regular Session | Enrolled
Bill Title: Small Business Procurement and Contract Act: employment social enterprises.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Vetoed) 2016-11-30 - Last day to consider Governor's veto pursuant to Joint Rule 58.5. [SB1219 Detail]
Download: California-2015-SB1219-Enrolled.html
BILL NUMBER: SB 1219 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 25, 2016
PASSED THE ASSEMBLY AUGUST 23, 2016
AMENDED IN ASSEMBLY AUGUST 19, 2016
AMENDED IN ASSEMBLY AUGUST 15, 2016
AMENDED IN ASSEMBLY AUGUST 1, 2016
AMENDED IN ASSEMBLY JUNE 30, 2016
AMENDED IN SENATE MAY 31, 2016
AMENDED IN SENATE APRIL 4, 2016
INTRODUCED BY Senator Hancock
(Coauthors: Senators Hall and Hueso)
(Coauthors: Assembly Members Brown, Eduardo Garcia, Gipson,
Gonzalez, and Jones-Sawyer)
FEBRUARY 18, 2016
An act to amend Sections 14836, 14837, 14838, 14838.5, 14838.64,
14838.7, 14839, 14839.1, 14840, 14842, and 14842.5 of the Government
Code, and to amend Section 10111 of the Public Contract Code,
relating to state contracting.
LEGISLATIVE COUNSEL'S DIGEST
SB 1219, Hancock. Small Business Procurement and Contract Act:
employment social enterprises.
Existing law, the Small Business Procurement and Contract Act,
grants a specified preference for small businesses and
microbusinesses in the award of a contract for goods, services, or
information technology to the state and in the construction of state
facilities. Existing law defines small business and microbusiness for
these and other purposes. Existing law permits a state agency and
the California State University to award specified types of contracts
with a value of between $5,000 and $250,000 to a certified small
business, including a microbusiness and a disabled veteran business
enterprise, without complying with certain competitive bidding
requirements, provided the agency obtains price quotations from 2 or
more small businesses, including microbusinesses, or 2 or more
disabled veteran business enterprises. Existing law establishes the
Office of Small Business and Disabled Veteran Business Enterprise
Services and prescribes duties for the office, which include
maintaining a bidders list of small businesses and disabled veteran
businesses and noting which small businesses also qualify as
microbusinesses. Existing law prescribes penalties for a small
business or microbusiness that provides incorrect information or
withholds information that leads to its incorrect classification as
such an entity and is awarded a contract because of that
classification. Existing law requires the Department of General
Services to make available a report on contracting activity.
This bill would, on and after October 1, 2018, grant an employment
social enterprise a preference and status similar to a small
business or microbusiness as described above. The bill would define
an employment social enterprise as a California-based social purpose
corporation, a benefit corporation, or a nonprofit corporation that
earns 51% or more of its enterprise revenue from the production or
assembly of goods or the provision of services and that demonstrates
evidence in its articles of incorporation or bylaws of its mission to
provide employment with on-the-job and life skills training to a
direct labor force that is comprised of 80% or more of enterprise
participants who face multiple barriers to employment. The bill would
define an "enterprise participant who faces multiple barriers to
employment" as an individual that meets certain criteria, including
that he or she has employment barriers, is or was homeless, or is an
out-of-school youth, as specified. The bill would require the
above-described report by the department to include information
relating to the level of participation of employment social
enterprises in state contracting. The bill would require specified
documents and facts to be certified under penalty of perjury. By
expanding the crime of perjury, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would incorporate additional changes to Sections 14837
and 14838 of the Government Code proposed by SB 1176 that would
become operative if this bill and SB 1176 are enacted and this bill
is enacted last. This bill also would incorporate additional changes
to Section 10111 of the Public Contract Code proposed by SB 159 that
would become operative if this bill and SB 159 are enacted and this
bill is enacted last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Unrelenting unemployment and deepening poverty are a reality
for many Californians. According to the United States Census Bureau,
California's poverty rate is 16.4 percent as compared to a national
rate of 15.6 percent. It is estimated that nearly a quarter of
California's children, 22.7 percent, are living in households with
annual incomes below the federal poverty line. A significant
contributing factor to these poverty rates are the education and
basic skill deficit of many Californians from rural and inner-city
areas, historically underserved population groups, and those who are
more recently encountering employment challenges, including the
formerly incarcerated and the homeless. Without comprehensive,
thoughtful, and strategic intervention, the economic disparity within
the state will only increase.
(b) Smaller-sized businesses and social enterprises can function
as economic engines. The social enterprise model uses entrepreneurial
activity to pursue a social purpose. Social enterprises advance the
social mission through market-based strategies and may be structured
as independent for-profit businesses, nonprofit ventures, or a
business unit or division within a larger nonprofit organization.
Small businesses and social enterprises are expected to become
increasingly important due to their ability to be more flexible and
better suited to meet niche market needs and respond to the
necessities of vulnerable communities. However, their small to medium
size and double bottom line mission also entail challenges when
meeting regulatory requirements, accessing capital, competing for
large-size contracts, and marketing their goods and services.
(c) California is home to a dynamic and growing sector of social
enterprises. According to the national Social Enterprise Alliance,
there are 98 social enterprises from California registered in its
database. The San Francisco chapter was founded in 2009 and the Los
Angeles chapter was founded in 2010. In 2015, 80 California-based
employment social enterprises, from startups to mature businesses,
competed in a national grant solicitation for the Social Innovation
Fund/REDF. Eight were awarded funding and are projected to generate
up to 14,000 job opportunities and over $375 million in revenues
between 2016 and 2020. In the Four-Year County Small Business and
Social Enterprise Utilization Plan of Los Angeles County, prepared in
May 2016, 19 social enterprises meet the Transitional Jobs
Opportunity Preference serving the county's workforce. Although this
is still a very young sector, a recent report by Mathematica Policy
Research found that for every dollar spent by a social enterprise,
there was a $2.23 return on investment to society. This includes
benefits to taxpayers, including reductions in government transfers,
incarceration, and health and housing costs paid for by the public
sector. Furthermore, the study also showed that the percentage of
total income from government transfers decreased from 71 percent to
24 percent and the total monthly income for workers increased by 91
percent. This study concludes that investing in the growth of social
enterprises, as well as their additional support services for
workers, can have a positive impact on people's lives, while
lessening the burden on government resources.
(d) (1) In major economies like those in the United Kingdom and
Australia, social enterprise is a mature sector. United Kingdom
government statistics identify around 70,000 social enterprises
contributing £24 billion to the economy and employing nearly a
million people. According to the Social Enterprise Survey for 2015,
50 percent of social enterprises reported a profit, 73 percent of
social enterprises earn more than 75 percent of their income from
trade, and 27 percent of social enterprises have the public sector as
their main source of income. Furthermore, 59 percent of social
enterprises employ at least one person who is disadvantaged in the
labor market, and for 16 percent of social enterprises, this group
forms at least half of all employees.
(2) Another recent study, by Social Ventures in Australia, found
that social enterprises have demonstrated that they can create jobs
for people excluded from the mainstream workforce, particularly the
long-term unemployed, and showed that this equity outcome is also
efficient, as government investment in the creation of businesses is
returned via taxation revenue and savings in social security
expenditure. In developing economies of Latin America, Asia, and
sub-Saharan Africa, social entrepreneurs are creating enterprises
that help solve social problems in their countries with a reduced
reliance on government or international aid to finance it.
(e) (1) Under the social enterprise umbrella, there are
mission-driven businesses known as employment social enterprises
(ESE) which are dedicated to hiring and assisting people who face
barriers to employment. They combine commercial activities-producing,
manufacturing, and distributing products and services-with a
transitional job that has supportive management and assistance to
foster the success of people who want to work but are often not given
the opportunity by mainstream employers. ESEs combine market
wage-paying transitional jobs while providing essential job readiness
services that help participants develop appropriate work habits and
basic skills, build real work experience, and manage life issues. A
2015 California study, the Mathematica Jobs Study, showed that the
percentage of people who had a job six to 12 months after their ESE
position was 20 points higher than people who received only
traditional workforce training support.
(2) Due to the ESE social mission, the cost of doing business
includes on-the-job workforce and employment training for a labor
force that is largely comprised of participants with significant
barriers to employment. In the nonprofit sector, business profits are
reinvested into the business to support training and grow more jobs.
It is also common for businesses to leverage other public and
private resources to support the additional cost of workforce
training.
(f) ESEs consist of the following elements:
(1) Small and medium-size nonprofit or for-profit businesses that
sell goods or services.
(2) A mission to employ low-income people with multiple barriers
to employment.
(3) Short- or long-term wage-paying employment that combines real
work, training and skill development, and supportive services for
participants who are overcoming barriers to employment.
(g) Elements of participant training and supportive services may
include one or more of the following:
(1) Experience with workplace norms and general behaviors that
facilitate success in any work environment and on-the-job training.
(2) Worksite supervision which includes feedback on performance
and coaching to help participants become work ready and transition to
traditional, unsupported employment.
(3) Linking participants to services that can help them stabilize
their lives, avoid relapse of behaviors such as drug abuse or
criminal activity, and obtain life supports related to needs such as
child care or housing.
(4) Job search and retention services which includes assistance
with resumes and cover letters, interview preparation, and job
searches.
(5) Job development and placement services to identify job
openings, schedule interviews, and follow up with employers after a
participant has an interview.
(6) Promote and support the completion of industry-recognized
certificates.
(7) Connections and enrollment support to community colleges,
educational institutions, vocational training and certificate
programs, preapprenticeship and apprenticeship programs, or other
opportunities to pursue career and education advancement.
SEC. 2. Section 14836 of the Government Code is amended to read:
14836. (a) The Legislature hereby declares that it serves a
public purpose, and it is of benefit to the state, to promote and
facilitate the fullest possible participation by all citizens in the
affairs of the State of California in every possible way. It is also
essential that opportunity is provided for full participation in our
free enterprise system by small business enterprises, and employment
social enterprises.
(b) Further, it is the declared policy of the Legislature that the
state should aid, counsel, assist, and protect, to the maximum
extent possible, the interests of small business concerns, including
microbusinesses and employment social enterprises, in order to
preserve free competitive enterprise and to ensure that a fair
proportion of the total purchases and contracts or subcontracts for
property and services for the state be placed with these enterprises.
SEC. 3. Section 14837 of the Government Code is amended to read:
14837. 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) "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.
(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.
(3) "Employment social enterprise" means an entity that meets all
of the following:
(A) Is organized as a social purpose corporation, a benefit
corporation, or a nonprofit corporation.
(B) Is a California-based entity that meets one or more of the
following:
(i) The entity has a principal office in California, and the
officers are domiciled in California.
(ii) The entity has a major office or manufacturing facility
located in California that has been licensed by the state on a
continuous basis to conduct business within the state and has
continuously employed California residents for work within the state
during the prior three years.
(iii) The entity is a nonprofit organization incorporated in
another state that has sponsored or co-sponsored substantive economic
and workforce development activities within this state and has
provided services to individuals who face multiple barriers to
employment in at least 20 of the prior 24 months.
(C) Earns 51 percent or more of its enterprise revenue from the
production or assembly of goods or the provision of services, or a
combination of both.
(D) Demonstrates evidence in its articles of incorporation,
bylaws, or both, of the employment social enterprise's mission to
provide employment with on-the-job and life skills training to a
direct labor force, not including supervisors and administration,
that is comprised of at least 80 percent of enterprise participants
who face multiple barriers to employment. To document on-the-job and
life skills training, an employment social enterprise shall provide
documentation, under penalty of perjury, that one or more of the
following services is being offered to individuals who face multiple
barriers to employment:
(i) Basic skills and job readiness assessment.
(ii) Referral system to industry-recognized certificates and
training.
(iii) Linkage to community colleges, adult schools, or other
education institutions to gain an education diploma or certificate.
(iv) Partnership with local or regional workforce development
boards.
(v) Job placement and retention services.
(E) (i) Has two or more enterprise participants who face multiple
barriers to employment.
(ii) "Enterprise participant who faces multiple barriers to
employment" means an individual that meets two or more of the
following:
(I) Is an individual with employment barriers, as defined in
subdivision (j) of Section 14005 of the Unemployment Insurance Code.
(II) Is or has been homeless, as defined by the United States
Department of Health and Human Services as of January 1, 2016.
(III) Is an out-of-school youth. "Out-of-school youth" means an
individual who meets the definition in Section 3164(a)(1)(B) of Title
29 of the United States Code.
(4) The director shall conduct a biennial review of the average
annual gross receipt levels specified in this subdivision for small
business and microbusiness and may adjust that level to reflect
changes in the California Consumer Price Index for all items. 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.
(5) 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 a small business or microbusiness that is
dominant in its industry. In addition, the standards shall provide
that the certified small business, microbusiness, or employment
social enterprise 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, microbusiness, or employment
social enterprise 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, microbusiness, or employment social enterprise
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) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 3.5. Section 14837 of the Government Code is amended to read:
14837. 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 fifteen million dollars ($15,000,000) or less over the
previous three years, or is a manufacturer, as defined in subdivision
(c), with 100 or fewer employees.
(B) For the purposes of public works contracts, contracts awarded
through competitive bids or otherwise for the erection, construction,
alteration, repair, or improvement of any kind upon real property,
"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 twenty-five
million dollars ($25,000,000) or less over the previous three years.
(2) "Microbusiness" is a small business which, together with
affiliates, has average annual gross receipts of five million dollars
($5,000,000) or less over the previous three years, or is a
manufacturer, as defined in subdivision (c), with 25 or fewer
employees.
(3) "Employment social enterprise" means an entity that meets all
of the following:
(A) Is organized as a social purpose corporation, a benefit
corporation, or a nonprofit corporation.
(B) Is a California-based entity that meets one or more of the
following:
(i) The entity has a principal office in California, and the
officers are domiciled in California.
(ii) The entity has a major office or manufacturing facility
located in California that has been licensed by the state on a
continuous basis to conduct business within the state and has
continuously employed California residents for work within the state
during the prior three years.
(iii) The entity is a nonprofit organization incorporated in
another state that has sponsored or co-sponsored substantive economic
and workforce development activities within this state and has
provided services to individuals who face multiple barriers to
employment in at least 20 of the prior 24 months.
(C) Earns 51 percent or more of its enterprise revenue from the
production or assembly of goods or the provision of services, or a
combination of both.
(D) Demonstrates evidence in its articles of incorporation,
bylaws, or both, of the employment social enterprise's mission to
provide employment with on-the-job and life skills training to a
direct labor force, not including supervisors and administration,
that is comprised of at least 80 percent of enterprise participants
who face multiple barriers to employment. To document on-the-job and
life skills training, an employment social enterprise shall provide
documentation, under penalty of perjury, that one or more of the
following services is being offered to individuals who face multiple
barriers to employment:
(i) Basic skills and job readiness assessment.
(ii) Referral system to industry-recognized certificates and
training.
(iii) Linkage to community colleges, adult schools, or other
education institutions to gain an education diploma or certificate.
(iv) Partnership with local or regional workforce development
boards.
(v) Job placement and retention services.
(E) (i) Has two or more enterprise participants who face multiple
barriers to employment.
(ii) "Enterprise participant who faces multiple barriers to
employment" means an individual that meets two or more of the
following:
(I) Is an individual with employment barriers, as defined in
subdivision (j) of Section 14005 of the Unemployment Insurance Code.
(II) Is or has been homeless, as defined by the United States
Department of Health and Human Services as of January 1, 2016.
(III) Is an out-of-school youth. "Out-of-school youth" means an
individual who meets the definition in Section 3164(a)(1)(B) of Title
29 of the United States Code.
(4) The director shall conduct a biennial review of the average
annual gross receipt levels specified in this subdivision for small
business and microbusiness and shall adjust that level to reflect
changes in the California Consumer Price Index for all items. 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.
(5) 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 a small business or microbusiness that is
dominant in its industry. In addition, the standards shall provide
that the certified small business, microbusiness, or employment
social enterprise 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, microbusiness, or employment
social enterprise 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, microbusiness, or employment social enterprise
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) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 4. Section 14838 of the Government Code is amended to read:
14838. In order to facilitate the participation of small
business, including microbusiness and employment social enterprise in
the provision of goods, information technology, and services to the
state, and in the construction (including alteration, demolition,
repair, or improvement) of state facilities, the directors of the
department and other state agencies that enter those contracts, each
within their respective areas of responsibility, shall do all of the
following:
(a) Establish goals, consistent with those established by the
Office of Small Business Certification and Resources, for the extent
of participation of small businesses, including microbusinesses, and
employment social enterprises, in the provision of goods, information
technology, and services to the state, and in the construction of
state facilities.
(b) Provide for a small business or employment social enterprise
preference, or nonsmall business preference for bidders that provide
for small business, microbusiness, and employment social enterprise
subcontractor participation, in the award of contracts for goods,
information technology, services, and construction, as follows:
(1) In solicitations where an award is to be made to the lowest
responsible bidder meeting specifications, the preference to small
business, microbusiness, and employment social enterprise shall be 5
percent of the lowest responsible bidder meeting specifications. The
preference to nonsmall business bidders that provide for small
business, microbusiness, or employment social enterprise
subcontractor participation shall be, up to a maximum of 5 percent of
the lowest responsible bidder meeting specifications, determined
according to rules and regulations established by the Department of
General Services.
(2) In solicitations where an award is to be made to the highest
scored bidder based on evaluation factors in addition to price, the
preference to small business, microbusiness, or employment social
enterprise shall be 5 percent of the highest responsible bidder's
total score. The preference to nonsmall business bidders that provide
for small business, microbusiness, or employment social enterprise
subcontractor participation shall be up to a maximum 5 percent of the
highest responsible bidder's total score, determined according to
rules and regulations established by the Department of General
Services.
(3) The preferences under paragraphs (1) and (2) shall not be
awarded to a noncompliant bidder and shall not be used to achieve any
applicable minimum requirements.
(4) The preference under paragraph (1) shall not exceed fifty
thousand dollars ($50,000) for any bid, and the combined cost of
preferences granted pursuant to paragraph (1) and any other provision
of law shall not exceed one hundred thousand dollars ($100,000). In
bids in which the state has reserved the right to make multiple
awards, this fifty thousand dollar ($50,000) maximum preference cost
shall be applied, to the extent possible, so as to maximize the
dollar participation of small businesses, including microbusinesses,
and employment social enterprises in the contract award.
(5) A bidder may be awarded a preference for both of the following
in a single bid:
(A) A small business preference or a nonsmall business preference
for bidders that provide for small business or microbusiness
subcontractor participation.
(B) An employment social enterprise preference or a nonsmall
business preference for bidders that provide for employment social
enterprise subcontractor participation.
(c) Give special consideration to small businesses,
microbusinesses, and employment social enterprises by both:
(1) Reducing the experience
required.
(2) Reducing the level of inventory normally required.
(d) Give special assistance to small businesses, microbusinesses,
and employment social enterprises in the preparation and submission
of the information requested in Section 14310.
(e) Under the authorization granted in Section 10163 of the Public
Contract Code, make awards, whenever feasible, to small business,
microbusiness, and employment social enterprise bidders for each
project bid upon within their prequalification rating. This may be
accomplished by dividing major projects into subprojects so as to
allow a small business, microbusiness, or employment social
enterprise contractor to qualify to bid on these subprojects.
(f) Small business, microbusiness, and employment social
enterprise bidders qualified in accordance with this chapter shall
have precedence over nonsmall business bidders in that the
application of a bidder preference for which nonsmall business
bidders may be eligible under this section or any other provision of
law shall not result in the denial of the award to a small business,
microbusiness, or employment social enterprise bidder. In the event
of a precise tie between the low responsible bid of a bidder meeting
specifications of a small business, microbusiness, or employment
social enterprise and the low responsible bid of a bidder meeting the
specifications of a disabled veteran-owned small business,
microbusiness, or employment social enterprise, the contract shall be
awarded to the disabled veteran-owned small business, microbusiness,
or employment social enterprise. This provision applies if the small
business, microbusiness, or employment social enterprise bidder is
the lowest responsible bidder, as well as if the small business,
microbusiness, or employment social enterprise bidder is eligible for
award as the result of application of the small business,
microbusiness, and employment social enterprise bidder preference
granted by subdivision (b).
(g) In order to qualify for the incentives under this section, an
employment social enterprise shall demonstrate and certify under
penalty of perjury the following:
(1) Not less than 70 percent of the total labor hours, excluding
supervisors and administration, required to perform the information
technology or construction contract shall be completed by an
enterprise participant who faces multiple barriers to employment.
(2) Not less than 70 percent of the total labor hours, excluding
supervisors and administration, required to manufacture the goods and
perform the contract shall be completed by an enterprise participant
who faces multiple barriers to employment. For an employment social
enterprise with 25 or fewer total employees, 50 percent of the total
labor hours, excluding supervisors and administration, required to
manufacture the goods and perform the contract shall be completed by
an enterprise participant who faces multiple barriers to employment.
(3) Not less than 80 percent of the total labor hours, excluding
supervisors and administration, required to provide services and
perform the contract shall be completed by an enterprise participant
who faces multiple barriers to employment.
(h) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 4.5. Section 14838 of the Government Code is amended to read:
14838. In order to facilitate the participation of small
business, including microbusiness and employment social enterprise in
the provision of goods, information technology, and services to the
state, and in the construction (including alteration, demolition,
repair, or improvement) of state facilities, the directors of the
department and other state agencies that enter those contracts, each
within their respective areas of responsibility, shall do all of the
following:
(a) Establish goals, consistent with those established by the
Office of Small Business Certification and Resources, for the extent
of participation of small businesses, including microbusinesses, and
employment social enterprises, in the provision of goods, information
technology, and services to the state, and in the construction of
state facilities.
(b) Provide for a small business or employment social enterprise
preference, or nonsmall business preference for bidders that provide
for small business, microbusiness, and employment social enterprise
subcontractor participation, in the award of contracts for goods,
information technology, services, and construction, as follows:
(1) In solicitations where an award is to be made to the lowest
responsible bidder meeting specifications, the preference to small
business, microbusiness, and employment social enterprise shall be 5
percent of the lowest responsible bidder meeting specifications. The
preference to nonsmall business bidders that provide for small
business, microbusiness, or employment social enterprise
subcontractor participation shall be, up to a maximum of 5 percent of
the lowest responsible bidder meeting specifications, determined
according to rules and regulations established by the Department of
General Services.
(2) In solicitations where an award is to be made to the highest
scored bidder based on evaluation factors in addition to price, the
preference to small business, microbusiness, or employment social
enterprise shall be 5 percent of the highest responsible bidder's
total score. The preference to nonsmall business bidders that provide
for small business, microbusiness, or employment social enterprise
subcontractor participation shall be up to a maximum 5 percent of the
highest responsible bidder's total score, determined according to
rules and regulations established by the Department of General
Services.
(3) The preferences under paragraphs (1) and (2) shall not be
awarded to a noncompliant bidder and shall not be used to achieve any
applicable minimum requirements.
(4) The preference under paragraph (1) shall not exceed fifty
thousand dollars ($50,000) for any bid, and the combined cost of
preferences granted pursuant to paragraph (1) and any other provision
of law shall not exceed one hundred thousand dollars ($100,000). In
bids in which the state has reserved the right to make multiple
awards, this fifty thousand dollar ($50,000) maximum preference cost
shall be applied, to the extent possible, so as to maximize the
dollar participation of small businesses, including microbusinesses,
and employment social enterprises in the contract award.
(5) A bidder may be awarded a preference for both of the following
in a single bid:
(A) A small business preference or a nonsmall business preference
for bidders that provide for small business or microbusiness
subcontractor participation.
(B) An employment social enterprise preference or a nonsmall
business preference for bidders that provide for employment social
enterprise subcontractor participation.
(c) Give special consideration to small businesses,
microbusinesses, and employment social enterprises by both:
(1) Reducing the experience required.
(2) Reducing the level of inventory normally required.
(d) Give special assistance to small businesses, microbusinesses,
and employment social enterprises in the preparation and submission
of the information requested in Section 14310.
(e) Under the authorization granted in Section 10163 of the Public
Contract Code, make awards, whenever feasible, to small business,
microbusiness, and employment social enterprise bidders for each
project bid upon within their prequalification rating. This may be
accomplished by dividing major projects into subprojects so as to
allow a small business, microbusiness, or employment social
enterprise contractor to qualify to bid on these subprojects.
(f) Small business, microbusiness, and employment social
enterprise bidders qualified in accordance with this chapter shall
have precedence over nonsmall business bidders in that the
application of a bidder preference for which nonsmall business
bidders may be eligible under this section or any other provision of
law shall not result in the denial of the award to a small business,
microbusiness, or employment social enterprise bidder. In the event
of a precise tie between the low responsible bid of a bidder meeting
specifications of a small business, microbusiness, or employment
social enterprise and the low responsible bid of a bidder meeting the
specifications of a disabled veteran-owned small business,
microbusiness, or employment social enterprise, the contract shall be
awarded to the disabled veteran-owned small business, microbusiness,
or employment social enterprise. This provision applies if the small
business, microbusiness, or employment social enterprise bidder is
the lowest responsible bidder, as well as if the small business,
microbusiness, or employment social enterprise bidder is eligible for
award as the result of application of the small business,
microbusiness, and employment social enterprise bidder preference
granted by subdivision (b).
(g) In order to qualify for the incentives under this section, an
employment social enterprise shall demonstrate and certify under
penalty of perjury the following:
(1) Not less than 70 percent of the total labor hours, excluding
supervisors and administration, required to perform the information
technology or construction contract shall be completed by an
enterprise participant who faces multiple barriers to employment.
(2) Not less than 70 percent of the total labor hours, excluding
supervisors and administration, required to manufacture the goods and
perform the contract shall be completed by an enterprise participant
who faces multiple barriers to employment. For an employment social
enterprise with 25 or fewer total employees, 50 percent of the total
labor hours, excluding supervisors and administration, required to
manufacture the goods and perform the contract shall be completed by
an enterprise participant who faces multiple barriers to employment.
(3) Not less than 80 percent of the total labor hours, excluding
supervisors and administration, required to provide services and
perform the contract shall be completed by an enterprise participant
who faces multiple barriers to employment.
(h) If the directors of the department and other state agencies
that enter into those contracts are unable to reach the goals
established under subdivision (a) in the year in which the act that
added this subdivision takes effect, the directors of the department
and other state agencies may count towards that goal, contracts with
firms that would be considered a small business or microbusiness
under the amendments made to Section 14837 by the act adding this
subdivision.
(i) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 5. Section 14838.5 of the Government Code is amended to read:
14838.5. (a) Notwithstanding the advertising, bidding, and
protest provisions of Chapter 6 (commencing with Section 14825) of
this part and Chapter 2 (commencing with Section 10290) and Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, a state agency may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than five thousand dollars ($5,000), but
less than two hundred fifty thousand dollars ($250,000), to a
certified small business, including a microbusiness, or to an
employment social enterprise, or to a disabled veteran business
enterprise, as long as the agency obtains price quotations from two
or more certified small businesses, including microbusinesses, or
from two or more employment social enterprises, or from two or more
disabled veteran business enterprises.
(b) In carrying out subdivision (a), a state agency shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, or from an employment
social enterprise, or from a disabled veteran business enterprise.
(c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the acquisition of goods, services, or
information technology, or a greater amount as administratively
established by the director, a state agency shall obtain at least two
price quotations from responsible suppliers whenever there is reason
to believe a response from a single source is not a fair and
reasonable price.
(d) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 6. Section 14838.64 of the Government Code is amended to
read:
14838.64. (a) Notwithstanding any other law, including, but not
limited to, the advertising, bidding, and protest provisions of
Chapter 6 (commencing with Section 14825) of this part and Chapter
2.5 (commencing with Section 10700) and Chapter 3 (commencing with
Section 12100) of Part 2 of Division 2 of the Public Contract Code,
the California State University may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than five thousand dollars ($5,000), but
less than two hundred fifty thousand dollars ($250,000), to a
certified small business, including a microbusiness, or to an
employment social enterprise, or to a disabled veteran business
enterprise, if the California State University obtains price
quotations from two or more certified small businesses, including
microbusinesses, or from two or more employment social enterprises,
or from two or more disabled veteran business enterprises.
(b) In carrying out subdivision (a), the California State
University shall consider a responsive offer timely received from a
responsible certified small business, including a microbusiness, or
from an employment social enterprise, or from a disabled veteran
business enterprise.
(c) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 7. Section 14838.7 of the Government Code is amended to read:
14838.7. (a) Notwithstanding the advertising and bidding
provisions of Chapter 6 (commencing with Section 14825) of this code
and Chapter 1 (commencing with Section 10100) of Part 2 of Division 2
of the Public Contract Code, a state agency may award a contract for
construction, including the erection, construction, alteration,
repair, or improvement of any state structure, building, road, or
other state improvement of any kind that has an estimated value of
greater than five thousand dollars ($5,000) but less than the cost
limit, as specified in subdivision (b) of Section 10105 of the Public
Contract Code, to a certified small business, including a
microbusiness, or to an employment social enterprise, or to a
disabled veteran business enterprise, as long as the agency obtains
written bid submittals from two or more certified small businesses,
including microbusinesses, or from two or more employment social
enterprises, or from two or more disabled veteran business
enterprises.
(b) In implementing subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, or from an employment
social enterprise, or from a disabled veteran business enterprise.
(c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the public work construction project, a state
agency shall obtain at least two written bid submittals from
responsible contractors whenever there is reason to believe a
response from a single source is not a fair and reasonable price.
(d) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 8. Section 14839 of the Government Code is amended to read:
14839. There is hereby established within the department the
Office of Small Business and Disabled Veteran Business Enterprise
Services. The duties of the office shall include:
(a) Compiling and maintaining a comprehensive bidders list of
qualified small businesses, employment social enterprises, and
disabled veteran business enterprises, and noting which small
businesses also qualify as microbusinesses.
(b) Coordinating with the federal Small Business Administration,
the Minority Business Development Agency, and the Office of Small
Business Development of the Department of Economic and Business
Development.
(c) Providing technical and managerial aids to small businesses,
microbusinesses, employment social enterprises, and disabled veteran
business enterprises, by conducting workshops on matters in
connection with government procurement and contracting.
(d) Assisting small businesses, microbusinesses, employment social
enterprises, and disabled veteran business enterprises, in complying
with the procedures for bidding on state contracts.
(e) Working with appropriate state, federal, local, and private
organizations and business enterprises in disseminating information
on bidding procedures and opportunities available to small
businesses, microbusinesses, employment social enterprises, and
disabled veteran business enterprises.
(f) Making recommendations to the department and other state
agencies for simplification of specifications and terms in order to
increase the opportunities for small business, microbusiness,
employment social enterprises, and disabled veteran business
enterprise participation.
(g) Developing, by regulation, other programs and practices that
are reasonably necessary to aid and protect the interest of small
businesses, microbusinesses, employment social enterprises, and
disabled veteran business enterprises in contracting with the state.
(h) Making efforts to develop, in cooperation with associations
representing counties, cities, and special districts, a core
statewide small business certification and employment social
enterprise certification application that may be adopted by all
participating entities, with any supplemental provisions to be added
as necessary by the respective entities.
(i) The information furnished by each contractor requesting a
small business, microbusiness, or employment social enterprise
preference shall be under penalty of perjury.
(j) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 9. Section 14839.1 of the Government Code is amended to read:
14839.1. (a) The department shall have sole responsibility,
except as provided for in subdivision (c), for certifying and
determining the eligibility of small businesses, microbusinesses, and
employment social enterprises under this chapter.
(b) Local agencies shall have access to the department's list of
certified small businesses and certified employment social
enterprises on the department's Internet Web site, which is available
to the public, for use as a reference guide to confirm a small
business or employment social enterprise certification.
(c) The department may assign all or portions of the certification
process, the determination of eligibility, or the auditing of
compliance with the articles of incorporation and the bylaws of
employment social enterprises to another state entity or local
entity.
(d) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 10. Section 14840 of the Government Code is amended to read:
14840. (a) In the process of certifying and determining the
eligibility of a disabled veteran business enterprise, a small
business enterprise, including a microbusiness, or an employment
social enterprise, the department shall require the applicant or
certified firm to submit a written declaration, under penalty of
perjury, that the information submitted to the department pursuant to
this chapter, and in the case of a disabled veteran enterprise all
information submitted to the department pursuant to Section 999.2 of
the Military and Veterans Code, is true and correct.
(b) (1) If the department determines that just cause exists, it
may require the owner of the disabled veteran business enterprise,
microbusiness, employment social enterprise, or small business, the
applicant, or the certified firm to complete and submit to the
department a federal Form 4506-T or Form 990 from the Internal
Revenue Service, United States Department of the Treasury, requesting
a transcript of a tax return. For an employment social enterprise,
the department may require documentation that the employment social
enterprise is operating in a manner consistent with its articles of
incorporation or bylaws.
(2) For the purposes of this subdivision, "just cause" means
either of the following circumstances exists:
(A) The department receives a complaint regarding the certified
firm.
(B) The department determines, based on its findings during the
course of any certification eligibility review of the applicant or
certified firm, that the action described in paragraph (1) is
necessary.
(c) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 11. Section 14842 of the Government Code is amended to read:
14842. (a) A business that has obtained classification as a small
business, microbusiness, or employment social enterprise by reason
of having furnished incorrect supporting information or by reason of
having withheld information, and that knew, or should have known, the
information furnished was incorrect or the information withheld was
relevant to its request for classification, and that by reason of
that classification has been awarded a contract to which it would not
otherwise have been entitled, shall do all of the following:
(1) Pay to the state any difference between the contract amount
and what the state's costs would have been if the contract had been
properly awarded.
(2) Pay to the awarding state agency and the department an amount
that is equal to the costs incurred for investigating the small
business or microbusiness certification that led to the finding that
the contract had been improperly awarded. Costs incurred shall
include, but are not limited to, costs and attorney's fees paid by
the awarding state agency or the department related to hearings and
court appearances.
(3) In addition to the amounts described in paragraphs (1) and
(2), be assessed a penalty in an amount of not more than 10 percent
of the amount of the contract involved.
(b) The department shall suspend any person who violates
subdivision (a) from transacting any business with the state either
directly as a prime contractor or indirectly as a subcontractor, for
a period of not less than 3 years and not more than 10 years. State
agencies may reject the bid of a supplier offering goods, information
technology, or services manufactured or provided by a subcontractor
if that subcontractor has been declared ineligible to transact any
business with the state under this chapter, even though the bidder is
a business in good standing.
(c) All payments to the state pursuant to paragraphs (1) and (2)
of subdivision (a) shall be deposited in the fund or funds out of
which payments on the contract involved were made, except payments to
the department made pursuant to paragraph (2) of subdivision (a)
shall be deposited in the Service Revolving Fund.
(d) All payments to the state pursuant to paragraph (3) of
subdivision (a) shall be deposited in the state General Fund.
(e) The small business certification, employment social enterprise
certification, and the disabled veteran business enterprise
certification if the business has multiple certifications, of a
business found to have violated subdivision (a) shall be revoked by
the department for a period of not less than five years. For an
additional or subsequent violation, the period of certification
revocation or suspension shall be extended for a period of up to 10
years. The certification revocation shall apply to the principals of
the business and any subsequent businesses formed by one or more of
those principals.
(f) Prior to the imposition of any sanctions under this article, a
business shall be entitled to a public hearing and to at least five
working days' notice of the time and place thereof. The notice shall
state the reasons for the hearing.
(g) Any business or person that fails to satisfy any of the
amounts specified in paragraphs (1) to (3), inclusive, of subdivision
(a) shall be prohibited from further contracting with the state
until all amounts are satisfied.
(h) For purposes of this section, "awarding state agency" means a
state agency or other state governmental entity that awarded the
contract, if it was not awarded by the department.
(i) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 12. Section 14842.5 of the Government Code is amended to
read:
14842.5. (a) It shall be unlawful for a person to do any of the
following:
(1) Knowingly and with intent to defraud, fraudulently obtain,
retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain,
certification as a small business, microbusiness, or employment
social enterprise for the purposes of this chapter.
(2) Willfully and knowingly make a false statement with the intent
to defraud, whether by affidavit, report, or other representation,
to a state official or employee for the purpose of influencing the
certification or denial of certification of any entity as a small
business, microbusiness, or employment social enterprise.
(3) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a business entity that has
requested certification as a small business, microbusiness, or
employment social enterprise.
(4) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person in fraudulently obtaining or
attempting to obtain, public moneys, contracts, or funds expended
under a contract, that are awarded by any state agency, department,
officer, or other state governmental agency, to which the person is
not entitled under this chapter.
(5) Knowingly and with intent to defraud, fraudulently represent
certified small business, microbusiness, or employment social
enterprise participation in order to obtain or retain a bid
preference or a state contract.
(6) Knowingly and
with intent to defraud, fraudulently represent that a commercially
useful function is being performed by a certified small business,
microbusiness, or employment social enterprise in order to obtain or
retain a bid preference or a state contract.
(7) Willfully and knowingly make or subscribe to any statement,
declaration, or other document that is fraudulent or false as to any
material matter, whether or not that falsity or fraud is committed
with the knowledge or consent of the person authorized or required to
present the declaration, statement, or document.
(8) Willfully and knowingly aid or assist in, or procure, counsel,
or advise, the preparation or presentation of a declaration,
statement, or other document that is fraudulent or false as to any
material matter, regardless of whether that falsity or fraud is
committed with the knowledge or consent of the person authorized or
required to present the declaration, statement, or document.
(9) Establish, or knowingly aid in the establishment of, or
exercise control over, a firm found to have violated any provision of
paragraphs (1) to (8), inclusive.
(b) (1) Any person who is found by the department to have violated
any of the provisions of subdivision (a) is subject to a civil
penalty of not less than ten thousand dollars ($10,000) nor more than
thirty thousand dollars ($30,000) for the first violation, and a
civil penalty of not less than thirty thousand dollars ($30,000) nor
more than fifty thousand dollars ($50,000) for each additional or
subsequent violation.
(2) A person who violates any of the provisions of subdivision (a)
shall pay all costs incurred by the awarding department and the
Department of General Services for any investigations that led to the
finding of the violation. Costs incurred shall include, but are not
limited to, costs and attorney's fees paid by the awarding state
agency or the department related to hearings and court appearances.
All payments to the state pursuant to this paragraph shall be
deposited in the fund or funds out of which payments on the contract
involved were made, except payments to the department shall be
deposited in the Service Revolving Fund.
(c) The department shall revoke the small business, microbusiness,
or employment social enterprise certification, and the disabled
veteran business enterprise certification if the business has both
certifications, of any person that violates subdivision (a) for a
period of not less than five years, and shall, in addition to the
penalties provided for in subdivision (b), suspend the person from
bidding on, or participating as a contractor, a subcontractor, or a
supplier in, any state contract or project for a period of not less
than 3 years nor more than 10 years. However, for an additional or
subsequent violation, the period of certification revocation or
suspension shall be extended for a period of up to three years. The
certification revocation shall apply to the principals of the
business and any subsequent businesses formed by one or more of those
principals. Any business or person who fails to satisfy any of the
penalties imposed pursuant to paragraphs (1) and (2) of subdivision
(b) shall be prohibited from further contracting with the state until
the penalties are satisfied.
(d) If a contractor, subcontractor, supplier, subsidiary, or
affiliate thereof, has been found by the department to have violated
subdivision (a) and that violation occurred within three years of
another violation of subdivision (a) found by the department, the
department shall prohibit that contractor, subcontractor, supplier,
subsidiary, or affiliate thereof, from entering into a state project
or state contract and from further bidding to a state entity, and
from being a subcontractor to a contractor for a state entity, and
from being a supplier to a state entity.
(e) (1) In addition to the penalties imposed by this section, if a
contractor is found to be in violation of paragraph (6) of
subdivision (a), any existing contract between that contractor and
any awarding department may be terminated at the discretion of the
awarding state agency, and, where payment to the contractor is made
directly by the state agency, the agency shall set off penalties and
costs due to the state against any payments due to that contractor.
In the event that the contracting state agency has forwarded the
contract and invoices to the Controller for payment, the state agency
shall reduce the amount due to the contractor as reflected in the
claim schedule submitted to the Controller by the amount of the
penalties and costs due the state. In addition, with regard to any
penalties and costs due to the state that the state agency has not
accounted for by either a set off against payments due to the
contractor or a reduction reflected in the claim schedule submitted
to the Controller, to the extent that the Controller is making
payments to the contractor on behalf of any state agency, the
Controller shall set off penalties and costs due against any invoices
due to the contractor from any other contract awarded to the
contractor.
(2) For purposes of this section:
(A) "Awarding state agency" means any state agency, department,
governmental entity, or other officer or entity empowered by law to
enter into contracts on behalf of the State of California.
(B) "Contractor" means any person or persons, firm, partnership,
corporation, or combination thereof who submits a bid and enters into
a contract with a representative of a state agency, department,
governmental entity, or other officer empowered by law to enter into
contracts on behalf of the State of California.
(f) The amendments made to this section by the act adding this
subdivision shall become operative on October 1, 2018.
SEC. 13. Section 10111 of the Public Contract Code is amended to
read:
10111. Commencing January 1, 2007, the department shall make
available a report on contracting activity containing the following
information:
(a) A listing of consulting services contracts that the state has
entered into during the previous fiscal year. The listing shall
include the following:
(1) The name and identification number of each contractor.
(2) The type of bidding entered into, the number of bidders,
whether the low bidder was accepted, and if the low bidder was not
accepted, an explanation of why another contractor was selected.
(3) The amount of the contract price.
(4) Whether the contract was a noncompetitive bid contract, and
why the contract was a noncompetitive bid contract.
(5) Justification for entering into each consulting services
contract.
(6) The purpose of the contract and the potential beneficiaries.
(7) The date when the initial contract was signed, and the date
when the work began and was completed.
(b) The report shall also include a separate listing of consultant
contracts completed during that fiscal year, with the same
information specified in subdivision (a).
(c) The information specified in subdivisions (a) and (b) shall
also include a list of any contracts underway during that fiscal year
on which a change was made regarding the following:
(1) The completion date of the contract.
(2) The amount of money to be received by the contractor, if it
exceeds 3 percent of the original contract price.
(3) The purpose of the contract or duties of the contractor. A
brief explanation shall be given if the change in purpose is
significant.
(d) The level of participation, by agency, of disabled veteran
business enterprises in statewide contracting and shall include
dollar values of contract award for the following categories:
(1) Construction.
(2) Architectural, engineering, and other professional services.
(3) Procurement of materials, supplies, and equipment.
(4) Information technology procurements.
Additionally, the report shall include a statistical summary
detailing each awarding department's goal achievement and a statewide
total of those goals.
(e) The level of participation by small business in state
contracting including:
(1) Upon request, an up-to-date list of eligible small business
bidders by general procurement and construction contract categories,
noting company names and addresses and also noting which small
businesses also qualify as microbusinesses.
(2) By general procurement and construction contract categories,
statistics comparing the small business and microbusiness contract
participation dollars to the total state contract participation
dollars.
(3) By awarding department and general procurement and
construction categories, statistics comparing the small business and
microbusiness contract participation dollars to the total state
contract participation dollars.
(4) Any recommendations for changes in statutes or state policies
to improve opportunities for small businesses and microbusinesses.
(5) A statistical summary of small businesses and microbusinesses
certified for state contracting by the number of employees at the
business for each of the following categories: 0-5, 26-50, 51-75, and
76-100.
(6) To the extent feasible, beginning in the year 2008, the number
of contracts awarded by the department in the categories specified
in paragraph (5).
(7) The number of contracts and dollar amounts awarded annually
pursuant to Section 14838.5 of the Government Code to small
businesses, microbusinesses, and disabled veteran business
enterprises.
(f) The level of participation of business enterprises, by race,
ethnicity, and gender of the owner, in contracts to the extent that
the information has been voluntarily reported to the department. In
addition, the report shall contain the levels of participation of
business enterprises, by race, ethnicity, and gender of the owner,
and whether the business is a lesbian, gay, bisexual, or transgender
owned business for the following categories of contracts, to the
extent that the information has been voluntarily reported to the
department:
(1) Construction.
(2) Purchases of materials, supplies, or equipment.
(3) Professional services.
(g) In the years 2011 and 2012, any errors reported to the
department by an awarding agency as required by Sections 10302,
10344, and 12104.5, in the previous fiscal year.
(h) The level of participation by employment social enterprises in
state contracting, including the following:
(1) Upon request, an up-to-date list of eligible employment social
enterprises bidders by general procurement and construction contract
categories.
(2) By general procurement and construction contract categories,
statistics comparing the employment social enterprises contract
participation dollars to the total state contract participation
dollars.
(3) By awarding department and general procurement and
construction categories, statistics comparing the employment social
enterprises contract participation dollars to the total state
contract participation dollars.
(4) Any recommendations for changes in statutes or state policies
to improve opportunities for employment social enterprises.
(5) The aggregate number of employees participating in employment
social enterprises and verification of on-the-job and life skills
training identified in subparagraph (D) of paragraph (3) of
subdivision (d) of Section 14837 of the Government Code. This
information shall be reported by categories, as established by the
department.
(i) The amendments made to this section by the act adding this
subdivision shall apply on and after January 1, 2013.
SEC. 13.5. Section 10111 of the Public Contract Code is amended to
read:
10111. Commencing January 1, 2007, the department shall make
available a report on contracting activity containing the following
information:
(a) A listing of consulting services contracts that the state has
entered into during the previous fiscal year. The listing shall
include the following:
(1) The name and identification number of each contractor.
(2) The type of bidding entered into, the number of bidders,
whether the low bidder was accepted, and if the low bidder was not
accepted, an explanation of why another contractor was selected.
(3) The amount of the contract price.
(4) Whether the contract was a noncompetitive bid contract, and
why the contract was a noncompetitive bid contract.
(5) Justification for entering into each consulting services
contract.
(6) The purpose of the contract and the potential beneficiaries.
(7) The date when the initial contract was signed, and the date
when the work began and was completed.
(b) The report shall also include a separate listing of consultant
contracts completed during that fiscal year, with the same
information specified in subdivision (a).
(c) The information specified in subdivisions (a) and (b) shall
also include a list of any contracts underway during that fiscal year
on which a change was made regarding the following:
(1) The completion date of the contract.
(2) The amount of money to be received by the contractor, if it
exceeds 3 percent of the original contract price.
(3) The purpose of the contract or duties of the contractor. A
brief explanation shall be given if the change in purpose is
significant.
(d) The level of participation, by agency, of disabled veteran
business enterprises in statewide contracting and shall include
dollar values of contract award for the following categories:
(1) Construction.
(2) Architectural, engineering, and other professional services.
(3) Procurement of materials, supplies, and equipment.
(4) Information technology procurements.
Additionally, the report shall include a statistical summary
detailing each awarding department's goal achievement and a statewide
total of those goals. An awarding department's goal achievement is
to be measured pursuant to subdivision (a) of Section 999.2 of the
Military and Veterans Code and subdivision (c) of Section 10115 of
this code.
(e) The level of participation by small business in state
contracting including:
(1) Upon request, an up-to-date list of eligible small business
bidders by general procurement and construction contract categories,
noting company names and addresses and also noting which small
businesses also qualify as microbusinesses.
(2) By general procurement and construction contract categories,
statistics comparing the small business and microbusiness contract
participation dollars to the total state contract participation
dollars.
(3) By awarding department and general procurement and
construction categories, statistics comparing the small business and
microbusiness contract participation dollars to the total state
contract participation dollars.
(4) Any recommendations for changes in statutes or state policies
to improve opportunities for small businesses and microbusinesses.
(5) A statistical summary of small businesses and microbusinesses
certified for state contracting by the number of employees at the
business for each of the following categories: 0-5, 26-50, 51-75, and
76-100.
(6) To the extent feasible, beginning in the year 2008, the number
of contracts awarded by the department in the categories specified
in paragraph (5).
(7) The number of contracts and dollar amounts awarded annually
pursuant to Section 14838.5 of the Government Code to small
businesses, microbusinesses, and disabled veteran business
enterprises.
(f) The level of participation of business enterprises, by race,
ethnicity, and gender of the owner, in contracts to the extent that
the information has been voluntarily reported to the department. In
addition, the report shall contain the levels of participation of
business enterprises, by race, ethnicity, and gender of the owner,
and whether the business is a lesbian, gay, bisexual, or transgender
owned business for the following categories of contracts, to the
extent that the information has been voluntarily reported to the
department:
(1) Construction.
(2) Purchases of materials, supplies, or equipment.
(3) Professional services.
(g) In the years 2011 and 2012, any errors reported to the
department by an awarding agency as required by Sections 10302,
10344, and 12104.5, in the previous fiscal year.
(h) The level of participation by employment social enterprises in
state contracting, including the following:
(1) Upon request, an up-to-date list of eligible employment social
enterprises bidders by general procurement and construction contract
categories.
(2) By general procurement and construction contract categories,
statistics comparing the employment social enterprises contract
participation dollars to the total state contract participation
dollars.
(3) By awarding department and general procurement and
construction categories, statistics comparing the employment social
enterprises contract participation dollars to the total state
contract participation dollars.
(4) Any recommendations for changes in statutes or state policies
to improve opportunities for employment social enterprises.
(5) The aggregate number of employees participating in employment
social enterprises and verification of on-the-job and life skills
training identified in subparagraph (D) of paragraph (3) of
subdivision (d) of Section 14837 of the Government Code. This
information shall be reported by categories, as established by the
department.
(i) The amendments made to this section by Chapter 861 of the
Statutes of 2012 shall apply on and after January 1, 2013.
SEC. 14. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 15. Section 3.5 of this bill incorporates amendments to
Section 14837 of the Government Code proposed by both this bill and
Senate Bill 1176. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2017, (2)
each bill amends Section 14837 of the Government Code, and (3) this
bill is enacted after Senate Bill 1176, in which case Section 3 of
this bill shall not become operative.
SEC. 16. Section 4.5 of this bill incorporates amendments to
Section 14838 of the Government Code proposed by both this bill and
Senate Bill 1176. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2017, (2)
each bill amends Section 14838 of the Government Code, and (3) this
bill is enacted after Senate Bill 1176, in which case Section 4 of
this bill shall not become operative.
SEC. 17. Section 13.5 of this bill incorporates amendments to
Section 10111 of the Public Contract Code proposed by this bill and
Senate Bill 159. It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2017, (2) each
bill amends Section 10111 of the Public Contract Code, and (3) this
bill is enacted after Senate Bill 159, in which case Section 10111 of
the Public Contract Code, as amended by Senate Bill 159, shall
remain operative only until January 1, 2017, at which time Section
13.5 of this bill shall become operative, and Section 13 of this bill
shall not become operative.
