(1) Existing law requires each state agency that significantly regulates or impacts small business to designate at least one person to serve as a small business liaison for the agency. Existing law requires the small business liaison to be responsible for, among other things, receiving and responding to complaints received by the agency from small businesses and assisting in ensuring that the procurement and contracting processes of the entity are administered in order to meet or exceed the goal of 25% small business participation.
This bill would also require the small business liaison to develop an “economic equity first” action plan and policy for the agency to provide, among other things, direction, recommendations, and strategies as to how to ensure that disadvantaged business enterprises are effectively involved and
benefiting from the procurement process of the agency. The bill would require the action plan and policy to be submitted to the agency secretary, department director, or executive officer by January 1, 2023, and would require adoption of that plan by January 1, 2024.
(2) Existing law establishes the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development, also known as GO-Biz, and prescribes the duties and functions of the Small Business Advocate, who is also the Director of the Office of Small Business Advocate. Existing law requires the advocate to prepare and submit a written annual report to the Governor and the Legislature that describes the activities and recommendations of the office, including an evaluation of the efforts of state agencies and, where appropriate, specific departments, that significantly regulate small businesses to assist minority and other small business enterprises, and make
appropriate recommendations to assist the development of these enterprises.
This bill would require the annual report to also include details regarding the 25% procurement goal for small businesses, microbusinesses, disadvantaged business enterprises, and disabled veteran business enterprise participation, as well as compliance and implementation of specified action plans and policies by state agency liaisons and advocates.
Existing law requires the advocate to post certain information on the GO-Biz or the advocate’s internet website, including how to receive assistance in certifying as a small business and identifying and participating in state procurement opportunities.
This bill would require the above-described information to be easily accessible from the homepage of the Go-Biz internet website.
(3) Existing law,
the Small Business Procurement and Contract Act, declares that it is essential that opportunity is provided for full participation in our free enterprise system by small business enterprises.
This bill would provide that small business enterprises include, but are not limited to, women-owned, LGBTQ+, and “socially and economically disadvantaged individuals,” as described by specified federal laws.
Existing law also declares that the state should aid, counsel, assist, and protect the interests of small business concerns, including microbusinesses, to preserve free competitive enterprise and ensure a fair proportion of the total purchases and contracts or subcontracts for property and services for the state be placed with these enterprises.
This bill would revise this policy declaration to also state that at least 25% of these purchases be placed with small business enterprises, as
described above.
(4) The Small Business Procurement and Contract Act requires the Director of General Services and the heads of other state agencies that enter into contracts for the acquisition of goods, services, and information technology and for the construction of state facilities to establish goals for the participation of small businesses and microbusinesses in these contracts, to provide for a small business preference in the award of these contracts, to give special consideration and special assistance to small businesses, and, whenever possible, to make awards to small businesses, as specified.
Existing law defines a “small business” for these purposes as, among other things, an independently owned and operated business that is not dominant in its field of operation that, commencing January 1, 2019, has average annual gross receipts of $15 million, as may be adjusted to
reflect changes in the California Consumer Price Index, or less over the previous 3 years. Existing law also defines a “microbusiness” as a small business which, together with affiliates, has average annual gross receipts of, commencing January 1, 2019, $5 million, as may be adjusted to reflect changes in the California Consumer Price Index, or less over the previous 3 years. Existing law requires the director to conduct a biennial review of those average annual gross receipt levels and authorizes the director to adjust the average annual gross receipts threshold to reflect changes in the California Consumer Price Index, as specified.
This bill would require the director to communicate and coordinate with the Small Business Advocate to execute this biennial review. The bill would, for purposes of the act, define “socially and economically disadvantaged individuals” to mean “disadvantaged business enterprises,” as described
by federal law.
Existing law requires the directors of the Department of General Services and other state agencies that enter into contracts concerning the provision of goods, information technology, services, and construction of state facilities, to establish goals for the extent of participation of small businesses, including microbusinesses, for those contracts.
This bill would instead require those directors to establish a minimum goal of 25%, as is reasonable per scope of procurement need relative to free market availability to deliver product, good, or service, by a small, disadvantaged, or disabled veteran business enterprise, consistent with goals established by the Office of Small Business and Disabled Veteran Business Enterprise Services, as specified.
The bill would also require each state agency, by January 1, 2027, to provide a compliance report, relative to the 25%
goal described above, to the Department of General Services. The bill would require the Director of General Services, by December 31, 2027, to testify to the Legislature on the effectiveness and outcomes of the statewide compliance of the minimum 25% goal of small, disadvantaged, or disabled veteran business enterprise procurement participation, and to annually thereafter provide a written report to the Legislature on compliance with this goal, as specified. The bill would provide that an agency’s failure to meet the minimum goal of 25% by January 1, 2027, would result in the agency having an audit conducted by the Department of General Services, along with a report to the Legislature as to the reasons and justifications for not meeting that goal, by no later than January 1, 2028.
Existing law also requires the directors of the Department of General Services and other state agencies that enter into contracts for the provision of goods, information technology,
services to the state, and construction of state facilities, to provide for a small business preference, in the award of contracts, in solicitations where an award is to be made to the highest bidder based on evaluation factors in addition to price, with that amount being 5% of the highest responsible bidder’s total score.
This bill would also require the preference to disadvantaged business enterprises, as defined above, to be a separate 5% of the highest responsible bidder’s total score.
Existing law requires the directors of the Department of General Services and other state agencies, with respect to the preference for small businesses and microbusinesses of 5% of the lowest responsible bidder, to not exceed $50,000 for any bid, and also prohibits the combined cost of preferences granted from exceeding $100,000. Existing law requires, in bids in which the state has reserved the right to make multiple awards, for this
$50,000 maximum preference cost to be applied, to the extent possible, so as to maximize the dollar participation of small businesses, including microbusinesses.
This bill would also provide that this preference be applied to the extent possible so as to maximize the dollar participation of disadvantaged business enterprises, as defined above. The bill would also require that special consideration be given to disadvantaged business enterprises by both reducing the experience required and reducing the level of inventory normally required and would update existing legislative findings regarding inequities faced by small businesses and disadvantaged business enterprises.
Existing law authorizes a state agency, notwithstanding specified advertising, budding, and protest provisions, 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 a disabled veteran business, as long as the agency obtains price quotations from 2 or more of these certified businesses or disabled veterans business enterprises.
This bill would include a disadvantaged business enterprise within the above-described contract award provisions.
(5) Existing law establishes the Office of Small Business and Disabled Veteran Business Enterprise Services within the Department of General Services and charges it with specified duties, including 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.
This bill would include, with those recommendations, simplification of
specifications and terms in order to increase opportunities for disadvantaged business enterprises.
Existing law requires the department, during the process of certifying and determining the eligibility of a small business or a disabled veteran business enterprise, to require the applicant or certified firm to submit a written declaration, under penalty of perjury, that the information submitted to the department pursuant to specified law is true and correct.
This bill would expand that procedure to apply to determining the eligibility of a disadvantaged business enterprise, as defined. By expanding the crime of perjury, the bill would create a state-mandated local program. The bill would also permit the Department of General Services to apply relevant federal certifications for the business categories and in its delineated procurement authority to other state agencies. The bill would include related legislative findings.
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.