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AB-230 Disabled veteran business enterprises.(2019-2020)

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Date Published: 09/06/2019 06:13 PM
AB230:v95#DOCUMENT

Amended  IN  Senate  September 06, 2019
Amended  IN  Senate  August 30, 2019
Amended  IN  Assembly  April 08, 2019
Amended  IN  Assembly  February 15, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 230


Introduced by Assembly Member Brough
(Principal coauthor: Assembly Member Cervantes)

January 17, 2019


An act to amend Sections 14839 and 14841 of the Government Code, to amend Section 999.5 of the Military and Veterans Code, and to amend Section 10111 of, and to add Section 10230 to, to the Public Contract Code, relating to veterans.


LEGISLATIVE COUNSEL'S DIGEST


AB 230, as amended, Brough. Disabled veteran business enterprises.
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 disabled veteran business enterprise (DVBE) participation incentive to bidders, which all state agencies are required to use when awarding contracts.
Existing law states the intent of the Legislature that every state procurement authority meet or exceed a DVBE participation goal of a minimum of 3% of total contract value. Existing law requires a department awarding a contract to, upon completion of that contract, require the prime contractor that entered into a subcontract with a DVBE to certify specified information to the awarding department, including, among other things, the amount each DVBE received from the prime contractor.
This bill would require that information to include proof of payment for work done by the DVBE DVBE, upon request of the awarding department, and the amount and percentage of work the prime contractor committed to provide to one or more DVBEs under the contract. The bill would require an awarding department to review the information provided to it by a prime contractor upon completion of the contract and to adjust its participation goals based on the difference between the awards committed to in the contract and the payments actually made to a DVBE. The bill would also require every state contract for which DVBE participation is included in the bid to contain a provision requiring the contractor to comply with all rules, regulations, ordinances, and statutes that apply to DVBEs. the California Disabled Veteran Business Enterprise Program.
Existing law allows a prime contractor to replace a DVBE identified by the prime contractor in its bid or offer with another DVBE.
This bill would instead require the prime contractor to use the DVBE subcontractors or suppliers proposed in the bid or proposal to the state unless a substitution is requested and approved, as specified.

Existing law requires the Department of General Services to make available a report on contracting activity containing, among other things, information on the level of participation, by agency, of DVBEs in statewide contracting and a statistical summary detailing each awarding department’s goal achievement and a statewide total of those goals.

This bill would specify that this report includes modified statistical summaries based on the adjustments made to participation goals based on the information received upon completion of the contract, and would make other changes to the statistical summaries in that report.

Existing law requires the Secretary of Veterans Affairs to appoint the California Disabled Veteran Business Enterprise Program Advocate and requires the advocate to perform certain duties, including disseminating information on the program and coordinating specified reports.
The bill would direct the Office of Small Business and Disabled Veteran Business Enterprise Services to coordinate with the state advocate.
This bill would incorporate additional changes to Section 999.5 of the Military and Veterans Code proposed by SB 588 to be operative only if this bill and SB 588 are enacted and this bill is enacted last.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 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 Disabled Veteran Business Enterprise Program.

SEC. 2.

 Section 14839 of the Government Code is amended to read:

14839.
 (a) 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)

(1) Compiling and maintaining a comprehensive bidders list of qualified small businesses and disabled veteran business enterprises, and noting which small businesses also qualify as microbusinesses.

(b)

(2) Coordinating with the Federal Small Business Administration, the Minority Business Development Agency, the California Disabled Veteran Business Enterprise Program Advocate, appointed by the Secretary of the Department of Veterans Affairs pursuant to Section 999.11 of the Military and Veterans Code, and the Office of Small Business Development of the Department of Economic and Business Development. Advocate, appointed by the Governor pursuant to Section 12098.3.

(c)

(3) Providing technical and managerial aids to small businesses, microbusinesses, and disabled veteran business enterprises, by conducting workshops on matters in connection with government procurement and contracting.

(d)

(4) Assisting small businesses, microbusinesses, and disabled veteran business enterprises, in complying with the procedures for bidding on state contracts.

(e)

(5) 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, and disabled veteran business enterprises.

(f)

(6) 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, and disabled veteran business enterprise participation.

(g)

(7) Developing, by regulation, other programs and practices that are reasonably necessary to aid and protect the interest of small businesses, microbusinesses, and disabled veteran business enterprises in contracting with the state. state, including, but not limited to, those specified in Article 6 (commencing with Section 999) of Chapter 6 of Division 4 of the Military and Veterans Code.

(h)

(8) Making efforts to develop, in cooperation with associations representing counties, cities, and special districts, a core statewide small business certification application that may be adopted by all participating entities, with any supplemental provisions to be added as necessary by the respective entities.

(i)

(b) The information furnished by each contractor requesting a small business or microbusiness preference shall be under penalty of perjury.

SEC. 3.

 Section 14841 of the Government Code is amended to read:

14841.
 Upon completion of a public an awarded contract for which a commitment to achieve small business or disabled veteran business enterprise participation goals was made, the contractor shall report to the awarding department the actual percentage of small business and disabled veteran business enterprise participation that was achieved. A contract that includes disabled veteran business enterprise participation shall also meet the requirements of Article 6 (commencing with Section 999) of Chapter 6 of Division 4 of the Military and Veterans Code.

SEC. 2.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. 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 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 shall do all of the following:
(1) Establish a method of monitoring adherence to the goals specified in Sections 999.1 and 999.2.
(2) Promote the California Disabled Veteran Business Enterprise Program to the fullest extent possible.
(3) Maintain complete records of its promotional efforts.
(4) 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.
(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. 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 provide proof of payment for that work and 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.
(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.
(e) An awarding department shall keep that certification on file. 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.

(f)Upon completion of an awarded contract for which a commitment to achieve a disabled veteran business enterprise goal was made, an awarding department shall review the documentation received pursuant to subdivision (d) for accuracy and completeness. Based on the review, the awarding department shall add or subtract the difference between the awards committed to in the contract and the payments actually made to the disabled veteran business enterprise. If no or incomplete documentation is received by the awarding department pursuant to subdivision (d), the total amount of the award shall be removed from the awarding department’s record of progress toward meeting the goals described in Sections 999.1 and 999.2. These adjustments shall be reported annually through the report required by Section 10111 of the Public Contract Code.

(g)

(f) After being awarded a contract, the prime contractor shall use the DVBE 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 Section 1896.73 of Title 2 of the California Code of Regulations. regulations adopted by the Department of General Services.

(h)

(g) The administering agency shall adopt rules and regulations, including standards for good faith efforts, regulations for the purpose of implementing this section.

SEC. 4.5.

 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. 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 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 shall do all of the following:
(1) Establish a method of monitoring adherence to the goals specified in Sections 999.1 and 999.2.
(2) Promote the California Disabled Veteran Business Enterprise Program to the fullest extent possible.
(3) Maintain complete records of its promotional efforts.
(4) 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.
(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. 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.
(e) An awarding department shall keep the certification required pursuant to subdivision (d) on file.

(4)That all payments under the contract have been made to the disabled veteran business enterprise. An awarding department shall keep that certification on file. A

(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.

(e)A prime contractor may, subject to the approval of the Department of General Services, replace a disabled veteran business enterprise identified by the prime contractor in its bid or offer, pursuant to subdivision (a) of Section 999.10, with another disabled veteran business enterprise.

(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.

(f)

(h) The administering agency shall adopt rules and regulations, including standards for good faith efforts, regulations for the purpose of implementing this section. Emergency regulations consistent with this section may be adopted.

SEC. 3.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)(1)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:

(A)Construction.

(B)Architectural, engineering, and other professional services.

(C)Procurement of materials, supplies, and equipment.

(D)Information technology procurements.

(2)Additionally, the report shall include a statistical summary detailing each awarding department’s goal achievement and a statewide total of those goals, including modified statistical calculations for prior years based on the postcontract certifications and proof of payment documentation received pursuant to subdivision (d) of Section 999.5 of the Military and Veterans 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: 0–25, 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 amendments made to this section by the act adding this subdivision shall apply on and after January 1, 2013.

SEC. 4.SEC. 5.

 Section 10230 is added to the Public Contract Code, to read:

10230.
 Every contract subject to this part, for which disabled veteran business enterprise participation is included in the bid, shall contain a provision requiring the contractor to comply with rules, regulations, ordinances, and statutes that apply to disabled veteran business enterprises, the California Disabled Veteran Business Enterprise Program as defined in Section 999 of the Military and Veterans Code, including, but not limited to, the requirements of subdivision (d) of Section 999.5 of the Military and Veterans Code.

SEC. 6.

 Section 4.5 of this bill incorporates amendments to Section 999.5 of the Military and Veterans Code proposed by both this bill and Senate Bill 588. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2020, (2) each bill amends Section 999.5 of the Military and Veterans Code, and (3) this bill is enacted after Senate Bill 588, in which case Section 4 of this bill shall not become operative.