Bill Text: CA SB1478 | 2021-2022 | Regular Session | Introduced
Bill Title: Disabled veteran business enterprises.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2022-06-21 - June 21 set for first hearing canceled at the request of author. [SB1478 Detail]
Download: California-2021-SB1478-Introduced.html
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Senate Bill
No. 1478
| Introduced by Senator Archuleta |
February 18, 2022 |
An act to amend Section 14838.5 of the Government Code, and to amend Section 999.5 of the Military and Veterans Code, relating to disabled veteran business enterprises.
LEGISLATIVE COUNSEL'S DIGEST
SB 1478, as introduced, Archuleta.
Disabled veteran business enterprises.
(1) The Small Business Procurement and Contract Act requires state agencies to provide for small business preference in the award of contracts for goods, information technology, services, and construction, with a 5% bid preference on applicable bid specifications. The act also authorizes a state agency to award a contract for the acquisition of goods, services, or information technology that has an estimated value of greater than $5,000, but less than $250,000, to a certified small business, including a microbusiness, or to a disabled veteran business enterprise (DVBE), as long as the agency obtains price quotations from 2 or more certified small businesses, including a microbusiness, or from a DVBE, without complying with specified competitive bidding requirements.
This bill, commencing March 1, 2023, and until March 1,
2027, would authorize a state agency to award a contract for services or information technology that has an estimated value of between $5,000 and $500,000 to a certified small business, including a microbusiness, or to a DVBE, as long as the agency obtains price quotations from 2 or more certified small businesses or 2 or more DVBEs. The bill would specify that a certified small business or DVBE that utilizes this process as an alternative to the competitive bidding requirements may not also receive the small business preference or the DVBE participation incentive, as specified.
(2) Under existing law, the administering agency for the California Disabled Veteran Business Enterprise Program is the Department of General Services, except in the case of contracts for professional bond services. Existing law requires the Director of General Services to adopt written policies and guidelines establishing a uniform process for state contracting to
provide a DVBE participation incentive to bidders, which all state agencies are required to use when awarding contracts. Existing law requires the Department of Veterans Affairs to maintain complete records of its promotional efforts regarding the program and requires the department to perform regular, periodic surveys of newly certified DVBEs. Existing law requires the Department of Veterans Affairs to appoint a California Disabled Veteran Business Enterprise Program Advocate.
This bill would require the department to establish a method an awarding department would be required to use to track and report adherence to specified goals and to provide guidance to awarding departments on how to process complaints regarding abuse of the DVBE program. The bill would also require the California Disabled Veteran Business Enterprise Program Advocate to promote and facilitate efforts to implement the program and to establish a system to track the effectiveness of the program,
as specified. The bill would additionally repeal the requirement that the department perform regular, periodic surveys of newly certified DVBEs.
(3) Existing law requires a department, after completing an awarded contract for which a commitment to achieve a DVBE goal was made, to require the prime contractor that entered into a subcontract with a DVBE to certify to the awarding department that all payments under the contract have been made to the DVBE.
This bill would require the awarding department to post a list of its state contracts for which certification has been received on its internet website for no less than 3 years.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
(a) This act shall be known, and may be cited, as the Procurement Transparency Act of 2022.(b) It is the intent of the Legislature in enacting this legislation to implement the recommendations of the California State Auditor Report 2018-114 on the California Disabled Veteran Business Enterprise Program, as well as other program improvements brought to the attention of the Assembly Committee on Jobs, Economic Development, and the Economy.
SEC. 2.
The Legislature finds and declares all of the following:(a) California’s dominance in many economic areas is based, in part, on the significant role small businesses play in the state’s $2.7 trillion economy.
(b) Two separate studies, one by the United States Census Bureau and another by the Kauffman Foundation, found that net job growth was strongest among businesses with fewer than 20 employees. California firms represented 12.6 percent of all businesses in the United States in 2015, with 88.3 percent of firms having fewer than 20 employees.
(c) The Small Business Procurement and Contract Act, administered
through the Department of General Services, was implemented more than 30 years ago to establish a small business preference within the state’s procurement process that would increase the number of contracts between the state and small businesses. In 1998, a disabled veteran business enterprise (DVBE) component was added.
(d) California has a 30-year history of using state contracting to support business development within targeted business populations. State law sets an annual 3 percent DVBE procurement participation goal, and a 2006 executive order sets a 25-percent goal for small businesses and microbusinesses within state agencies, departments, boards, and commissions.
(e) The Small Business Procurement and Contract Act states that it is the policy of the State of California that the state aid the interests of small businesses in order to preserve free competitive enterprise
and to ensure that a fair portion of the total purchases and contracts of the state be placed with these enterprises.
(f) California law further states that DVBE participation is strongly encouraged to recognize the sacrifices of California’s disabled military veterans and to address the special needs of disabled veterans seeking rehabilitation and training through entrepreneurship. A majority of DVBEs certified by the state are smaller size firms, with 75.4 percent having dual certifications as a DVBE and microbusiness and 9.6 percent having dual certifications as a DVBE and small business.
(g) Supporting small business development has shown to be a successful inclusive economic growth strategy advantaging businesses throughout the state, including historically underserved business groups including minority, women, and veteran-owned businesses, and hard-to-serve areas of the
state, including low-wealth, rural, and disaster-impacted communities.
(h) In order for the state to fully leverage the economic opportunities represented by supporting small businesses and DVBEs, it is the intent of the Legislature that the Department of General Services, the Office of Small Business Advocate, and the department-level and agency-level Small Business Ombudsmen actively promote small business and DVBE certifications, help DVBEs and small businesses market their products, goods, and services to the state, and promote the use of technologies and other innovative solutions for notifying small businesses and DVBEs of state contracting opportunities.
SEC. 3.
Section 14838.5 of the Government Code is amended to read:14838.5.
(a) (1) 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 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 disabled veterans business enterprises.(2) On and after March 1, 2023, and until March 1, 2027, for the purposes of contracts for services and information technology, a state agency may, notwithstanding the advertising, bidding, and protest provisions of Chapter 6 (commencing with Section 14825) and of Chapter 2 (commencing with Section 10290) and Chapter 3 (commencing with Section 12100) of Part 2 of Division 2 of the Public Contract Code, award a contract that has an estimated value greater than five thousand dollars ($5,000) but less than five hundred thousand dollars ($500,000) to a certified small business, including a microbusiness, 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 disabled veterans 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 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) A certified small business or disabled veteran business enterprise that submits a bid or cost estimate using the process in subdivision (a) or (c) shall not, on the same bid or cost estimate, also receive the small business preference set forth in subdivision (b) of Section 14838 or the disabled veteran business enterprise participation incentive provided in Section 999.5 of the Military and Veterans Code.
SEC. 4.
Section 999.5 of the Military and Veterans Code is amended to read:999.5.
(a) The administering agency for the California Disabled Veteran Business Enterprise Program is the Department of General Services, except in the case of contracts for professional bond services. In carrying out these duties, the Department of General Services shall do all of the following:(1) Consult with the California Disabled Veteran Business Enterprise Program Advocate, appointed by the Secretary of the Department of Veterans Affairs pursuant to Section 999.11, on all matters relating to the California Disabled Veteran Business Enterprise Program.(2) Establish a method an awarding department shall use to track and
report adherence to the goals specified in Sections 999.1 and 999.2.(3) Provide guidance to awarding departments on how to process complaints regarding abuse of the program, including violations under Section 999.9.(a)The administering agency for the California Disabled Veteran Business Enterprise Program is the Department of General Services, except in the case of contracts for professional bond services. The Department of General Services shall consult with the California Disabled Veteran Business Enterprise Program Advocate, appointed by the Secretary of the Department of Veterans Affairs pursuant to Section 999.11, on all matters relating to the California Disabled Veteran Business Enterprise Program. The Director of General Services shall adopt
(4) Adopt written policies and guidelines establishing a uniform process for state contracting that would provide a disabled veteran business enterprise participation incentive to bidders. The incentive program shall be used by all state agencies when awarding contracts.
(b) The Department of Veterans Affairs California Disabled Veteran Business Enterprise Program Advocate, appointed pursuant to Section 999.11 by the Secretary of Veterans Affairs, shall do all of the following, as
further described in Section 999.11:
(1)Establish a method of monitoring adherence to the goals specified in Sections 999.1 and 999.2.
(2)
(1) Promote and facilitate efforts to implement the California Disabled Veteran Business Enterprise Program to the fullest extent possible.
and the provisions of this article.
(3)Maintain complete records of its promotional efforts.
(4)
(2) Establish a system to track the effectiveness of its efforts to promote the California Disabled Veteran Business Enterprise Program, which shall include regular, periodic surveys of newly certified
disabled veteran business enterprises to determine how they learned of the program, why they became certified, and what their experience with awarding departments has been. may be used by the Department of Veterans Affairs and other state agencies in meeting the requirements of Section 999.12. The system shall include standards for recordkeeping as necessary to evaluate the effectiveness of promotional activities.
(c) An awarding department shall not credit toward the department’s 3-percent goal state funds expended on a contract with a disabled veteran business enterprise that is not certified at the time of the award or does not meet and maintain the certification requirements.
(d) Upon completion of an awarded contract for which a commitment to achieve a disabled
veteran business enterprise goal was made, an awarding department shall require the prime contractor that entered into a subcontract with a disabled veteran business enterprise to certify to the awarding department all of the following:
(1) The total amount the prime contractor received under the contract.
(2) The name and address of the disabled veteran business enterprise that participated in the performance of the contract and the contract number.
(3) The amount and percentage of work the prime contractor committed to provide to one or more disabled veteran business enterprises under the requirements of the contract and the amount each disabled veteran business enterprise received from the prime contractor.
(4) That all payments under the contract
have been made to the disabled veteran business enterprise. Upon request by the awarding department, the prime contractor shall provide proof of payment for the work. An awarding department shall post a list of its state contracts, by contract number, for which certification has been received, on its internet website for no less than three years.
(e) An awarding department shall keep the certification required pursuant to subdivision (d) on file.
(f) A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation in the minimum amount of two thousand five hundred dollars ($2,500) and the maximum amount of twenty-five
thousand dollars ($25,000). An action for a civil penalty under this subdivision may be brought by any public prosecutor in the name of the people of the State of California and the penalty imposed shall be enforceable as a civil judgment.
(g) After being awarded a contract, the prime contractor shall use the disabled veteran business enterprise subcontractors or suppliers proposed in the bid or proposal to the state unless a substitution is requested and approved. The prime contractor shall request the substitution in writing to the awarding department and receive approval from both the awarding department and the Department of General Services in writing prior to the commencement of any work by the proposed subcontractor or supplier. A substitution pursuant to this subdivision shall additionally comply with regulations adopted by the Department of General Services.
(h) The
administering agency shall adopt rules and regulations for the purpose of implementing this section.
