THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY K. BOYLE, MARKOSEK, B. BOYLE, BRENNAN, CALTAGIRONE, CARROLL, DALEY, DONATUCCI, EVERETT, FABRIZIO, GEIST, GEORGE, GERBER, GIBBONS, GOODMAN, HARKINS, HESS, JOHNSON, JOSEPHS, KORTZ, KULA, MAHONEY, M. O'BRIEN, PAYTON, PETRARCA, READSHAW, K. SMITH, STABACK, WHEATLEY, WHITE AND CLYMER, MARCH 17, 2011

REFERRED TO COMMITTEE ON VETERANS AFFAIRS AND EMERGENCY PREPAREDNESS, MARCH 17, 2011  

AN ACT

Amending Title 51 (Military Affairs) of the Pennsylvania

Consolidated Statutes, providing for service-disabled

veteran-owned business participation goals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Title 51 of the Pennsylvania Consolidated Statutes

is amended by adding a chapter to read:

CHAPTER 72

SERVICE-DISABLED VETERAN-OWNED BUSINESS

PARTICIPATION GOALS

Sec.

7201.  Definitions.

7202.  Service-disabled veteran-owned business participation

goals.

7203.  Bids for bond services.

7204.  Monitoring.

7205.  Cooperation.

7206.  Reporting requirements.

7207.  Validity of bonds.

7208.  Information required in bid.

7209.  Appointment of State service-disabled veteran-owned

business coordinator.

7210.  Agency service-disabled veteran-owned business advocates.

§ 7201.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Administering agency."  The State Treasurer, in the case of

contracts for professional bond services, and the Department of

General Services, in the case of all other contracts.

"Awarding department."  A Commonwealth agency, department,

governmental entity or other officer or entity empowered by law

to issue bonds or enter into contracts on behalf of the

Commonwealth, including a school district when it expends

Commonwealth funds for construction, professional services,

materials, supplies, equipment, alterations, repairs or

improvements.

"Bonds."  Bonds, notes, warrants, certificates of

participation and other evidences of indebtedness issued by or

on behalf of the Commonwealth.

"Commercially useful function."  A person or entity performs

a commercially useful function if the person or entity does all

of the following:

(1)  Is responsible for the execution of a distinct

element of the work of a contract.

(2)  Carries out the responsibility by actually

performing, managing or supervising the work involved.

(3)  Performs work that is normal for the person's or

entity's business services and functions.

(4)  Does not further subcontract a portion of the work

that is greater than that expected to be subcontracted by

normal industry practices.

A contractor, subcontractor or supplier shall 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

service-disabled veteran-owned business participation.

"Contract."  An agreement to provide professional bond

services to the Commonwealth or an awarding department. The term

also includes an agreement to provide labor, services, material,

supplies or equipment in the performance of a contract,

franchise, concession or lease granted, let or awarded for and

on behalf of the Commonwealth.

"Contractor."  A person or sole proprietorship, partnership,

joint venture, corporation or combination thereof that submits a

bid and enters into a contract with a representative of a

Commonwealth agency, department, governmental entity or other

officer empowered by law to enter into contracts on behalf of

the Commonwealth. The term includes a provider of professional

bond services that enters into a contract with an awarding

department.

"Goal."  A numerically expressed objective that an awarding

department or contractor is required to make efforts to achieve.

"Management and control."  Effective and demonstrable

management of a business entity.

"Service-disabled veteran."  A veteran of the armed forces of

the United States who has at least a 10% service-related

disability and who is domiciled in this Commonwealth.

"Service-disabled veteran-owned business."  A sole

proprietorship, corporation or partnership certified by an

administering agency as meeting all of the following

requirements:

(1)  Its home office is located in the United States and

it is not a branch or subsidiary of a foreign corporation,

foreign firm or other foreign-based business.

(2)  In the case of a sole proprietorship, not less than

51% of the business is owned by one or more disabled

veterans; in the case of a publicly owned business, not less

than 51% of its stock is owned by one or more disabled

veterans; in the case of a subsidiary that is wholly owned by

a parent corporation, not less than 51% of the voting stock

of the parent corporation is owned by one or more disabled

veterans; or, in the case of a joint venture, not less than

51% of the joint venture's management, control and earnings

are held by one or more disabled veterans. Status as a

service-disabled veteran-owned business concern shall be

determined in accordance with 13 CFR Pt. 125 (relating to

government contracting programs).

(3)  Daily business operations are managed and controlled

by one or more disabled veterans. The disabled veterans who

exercise management and control are not required to be the

same disabled veterans as the owners of the business.

Notwithstanding paragraphs (1), (2) and (3), after the death or

the certification of a permanent medical disability of a

disabled veteran who is a majority owner of a business that

qualified as a service-disabled veteran-owned business prior to

that death or certification and solely for purposes of any

contract entered into before the death or certification, the

business shall be deemed to be a service-disabled veteran-owned

business for a period of not more than three years after the

date of death or certification of a permanent medical disability

if the business is inherited or controlled by the spouse or

child of the majority owner or by both of those persons.

"Service-disabled veteran-owned business contractor,

subcontractor or supplier."  A person or entity that has been

certified by an administering agency under this chapter and that

performs a commercially useful function in providing services or

goods that contribute to the fulfillment of contract

requirements.

§ 7202.  Service-disabled veteran-owned business participation

goals.

(a)  Required goals.--Notwithstanding any other provision of

law, an awarding department shall have annual Statewide

participation goals of not less than 5% for service-disabled

veteran-owned businesses for all contracts entered into by the

awarding department during the year. The goal shall apply to the

overall dollar amount expended by the awarding department with

respect to the contracts.

(b)  Cocounsel, joint-venture and subcontracting

relationships.--

(1)  An awarding department shall support a program for

assigning representative portions of contracts for the

purpose of meeting the goals established under subsection

(a). An awarding department shall consider establishing

cocounsel, joint-venture and subcontracting relationships

with service-disabled veteran-owned businesses.

(2)  Nothing in this chapter shall be construed to

preclude an awarding department from achieving the goals set

forth in this section without requiring joint ventures,

cocounsel or subcontracting arrangements.

§ 7203.  Bids for bond services.

Notwithstanding the provisions of section 7202 (relating to

service-disabled veteran-owned business participation goals), if

a contract for professional bond services is to be obtained by

competitive bid, the awarding department shall, at a minimum,

take all of the following actions:

(1)  Deliver the notice of sale or other notification of

intention to issue the bonds to all service-disabled veteran-

owned businesses that have listed their names with the

awarding department.

(2)  State in all notices of sale and other notifications

of intention to issue bonds that service-disabled veteran-

owned businesses are encouraged to respond.

(3)  Require all submitting bidders to certify their

awareness of the goals of the awarding department in

accordance with this chapter.

§ 7204.  Monitoring.

(a)  General rule.--An administering agency and awarding

department shall establish a method of monitoring achievement of

the goals specified in section 7202 (relating to service-

disabled veteran-owned business participation goals).

(b)  Contractor reporting.--A contractor shall report to the

administering agency or awarding department upon the completion

of any sale of bonds.

(c)  Certain contracts not to be included toward goal.--An

awarding department shall not credit toward the department's

goal funds expended on a contract with a service-disabled

veteran-owned business that does not meet and maintain the

certification requirements.

§ 7205.  Cooperation.

In implementing this chapter, an awarding department shall

utilize existing resources available through the Department of

Military and Veterans Affairs, the United States Department of

Veterans Affairs and the United States Small Business

Administration.

§ 7206.  Reporting requirements.

(a)  Reports of awarding departments.--

(1)  On July 1 of each year, each awarding department

shall report to the Governor, the General Assembly, the

Department of General Services and the Department of Military

and Veterans Affairs on the participation by service-disabled

veteran-owned businesses in contracts for the previous fiscal

year.

(2)  If an awarding department has not met its

established goal for the previous fiscal year, the awarding

department shall identify the reasons for the awarding

department's shortfall and the steps the awarding department

will take to achieve its goal.

(b)  Reports by Department of General Services.--On September

1 of each year, the Department of General Services shall present

to the Governor, the General Assembly and the Department of

Veterans Affairs a Statewide statistical summary detailing each

awarding department's goal achievement and a Statewide total of

the goals.

§ 7207.  Validity of bonds.

(a)  General rule.--Notwithstanding any other provision of

this chapter to the contrary, no bonds, contracts, notes or

other obligations issued by an awarding department to provide

for the payment of any contract subject to this chapter shall be

deemed invalid or unenforceable as a result of the failure of an

awarding department to meet its goals established under this

chapter.

(b)  Actions prohibited.--No action may be maintained to

enjoin the issuance of any bonds to which this chapter applies

or the enforcement of any contract for professional bond

services based on an awarding department's failure to meet the

goals set forth in section 7202 (relating to service-disabled

veteran-owned business participation goals).

§ 7208.  Information required in bid.

An awarding department taking bids in connection with the

award of a contract shall provide, in the general conditions

under which bids will be received, that any person making a bid

or offer to perform a contract shall, in the bid or offer, state

the following information:

(1)  The name and location of the place of business of

each subcontractor certified as a service-disabled veteran-

owned business that will perform work or labor or render

service to the prime contractor in connection with the

performance of the contract and who will be used by the prime

contractor to fulfill service-disabled veteran-owned business

participation goals.

(2)  The portion of work that will be performed by each

subcontractor under paragraph (1). Except in cases of

emergency where a contract is necessary for the immediate

preservation of the public health, welfare or safety or

protection of State property, a prime contractor shall list

only one subcontractor for each portion of work as defined by

the prime contractor in the bid or offer.

§ 7209.  Appointment of State service-disabled veteran-owned

business coordinator.

The Department of Military and Veterans Affairs shall appoint

a State service-disabled veteran-owned business coordinator to

do all of the following:

(1)  Oversee, promote and coordinate efforts to

facilitate implementation of this chapter.

(2)  Disseminate information on this chapter.

(3)  Coordinate reports under section 7206 (relating to

reporting requirements).

(4)  Coordinate with administering agencies and existing

and potential service-disabled veteran-owned businesses to

achieve the participation goals set forth under section 7202

(relating to service-disabled veteran-owned business

participation goals).

§ 7210.  Agency service-disabled veteran-owned business

advocates.

Each awarding department shall appoint an agency service-

disabled veteran-owned business advocate. A service-disabled

veteran-owned business advocate shall do all of the following:

(1)  Assist certified service-disabled veteran-owned

businesses in participating in the awarding agency's

contracting process.

(2)  Assist contract officers in seeking service-disabled

veteran-owned businesses to participate in the awarding

agency's contract and procurement activities.

(3)  Disseminate information to the awarding agency's

contract and procurement staff.

(4)  Serve as an advocate for service-disabled veteran-

owned businesses that are utilized as the awarding agency's

contractors and subcontractors.

(5)  Coordinate with the State service-disabled veteran-

owned business coordinator to achieve the participation goals

set forth under section 7202 (relating to service-disabled

veteran-owned business participation goals).

Section 2.  The Department of Military and Veterans Affairs

may promulgate rules and regulations to administer this act.

Section 3.  This act shall apply to contracts entered into on

or after January 1, 2012.

Section 4.  This act shall take effect in 60 days.