BILL NUMBER: AB 1218 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 7, 2015
AMENDED IN ASSEMBLY APRIL 23, 2015
AMENDED IN ASSEMBLY APRIL 14, 2015
INTRODUCED BY Assembly Member Weber
(Principal coauthor: Assembly Member Eduardo Garcia)
( Principal coauthor: Senator
Nielsen )
( Coauthor: Assembly Member
Kim )
FEBRUARY 27, 2015
An act to amend Sections 999.1, 999.2, 999.5, and 999.12
of of, and to add Section 999.4 to, the Military
and Veterans Code, and to amend Section 10111 of the Public Contract
Code, relating to public contracts.
LEGISLATIVE COUNSEL'S DIGEST
AB 1218, as amended, Weber. Public contracts: disabled veteran
business enterprise.
Existing law requires a state agency, department, officer, or
other state governmental entity, to meet an annual statewide
participation goal of not less than 3% for disabled veteran business
enterprises for specified contracts entered into by the awarding
department during the year. The administering agency for the
California Disabled Veteran Business Enterprise Program is the
Department of General Services. Existing law requires the Director of
General Services to adopt written policies and guidelines
establishing a uniform process for state contracting that provides a
disabled veteran business enterprise participation incentive to
bidders.
This bill would require a greater participation incentive to be
provided to a prime contractor who owns a disabled veteran business
enterprise, as specified, and has not previously entered into
any contracts with the state as a prime contractor, and to a
disabled veteran business enterprise that employs a workforce that is
more than 50% veterans or that has not previously entered into any
contracts with the state. The bill would require an awarding
department to consider whether greater disabled veteran business
enterprise participation in excess of 3% should be required on its
contracts.
Existing law requires the Department of Veterans Affairs to
maintain complete records of its promotional efforts to promote the
program and to establish a system to track the effectiveness of its
promotional efforts.
This bill would require the department to maintain additional
information relating to its promotional efforts, as specified.
Existing law requires a prime contractor who entered into a
subcontract with a disabled veteran business enterprise to make
certain disclosures to the awarding department after completion of
the contract.
This bill would require the awarding department that receives this
information to maintain those records for a minimum of 5 years, as
specified. The bill would require every awarding department to
establish a procedure to ensure the accuracy and completeness of
those records. The bill would further require a contractor who
subcontracts wit h disabled veteran business enterprises
to comply with additional requirements when providing its
certification of expenditures to an awarding department, as
specified.
Existing law requires each awarding department to appoint an
agency Disabled Veteran Business Enterprise Program Advocate.
Existing law requires the agency Disabled Veteran Business Enterprise
Program Advocate to, among other things, assist certified disabled
veteran business enterprises in participating in that agency's
contracting process.
This bill would additionally require the advocate to maintain
records of the promotional efforts hosted or attended by the
advocate, as specified.
Existing law requires a department, as defined under the State
Contract Act, to report on contracting activity containing specified
information.
This bill would require a department, as defined, to establish
guidelines for reporting multiyear contracts. The bill would make
other minor, technical changes to the reporting requirements under
the program.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 999.1 of the Military and Veterans Code is
amended to read:
999.1. (a) (1) Notwithstanding any other law, each awarding
department shall have annual statewide participation goals of not
less than 3 percent for disabled veteran business enterprises for
contracts entered into by the awarding department during the year for
professional bond services. This section shall not apply if a
contract for professional bond services of an underwriter is to be
obtained by competitive bid. However, each awarding department shall
establish goals for contracts to be obtained by competitive bid for
professional bond services.
(2) These goals shall apply to the overall dollar amount
awarded and expended by the awarding department with
respect to the contracts for professional bond services relating to
the issuance of bonds by the awarding department, including amounts
spent as underwriter's discounts.
(b) In attempting to meet the goals set forth in subdivision (a),
the awarding department shall consider establishing cocounsel, joint
venture, and subcontracting relationships, including disabled veteran
business enterprises, in all contracts for professional bond
services. It shall be the responsibility of the head of each awarding
department to be supportive of the Treasurer's program for assigning
representative portions of professional bond services contracts for
purposes of meeting the goals established pursuant to this section.
However, nothing in this article shall preclude the awarding
department from achieving the goals set forth in this section without
requiring joint ventures, cocounsel, or subcontracting arrangements.
(c) This section shall not limit the ability of any awarding
department to meet a goal higher than those set forth in subdivision
(a) for the participation of disabled veteran business enterprises in
contracts awarded by the awarding department.
(d) In order to meet the 3-percent annual goal set forth in
paragraph (1) of subdivision (a), an awarding department shall
consider whether greater disabled veteran business enterprise
participation in excess of 3 percent should actually be required on
contracts entered into pursuant to this section for professional bond
services.
SEC. 2. Section 999.2 of the Military and Veterans Code is amended
to read:
999.2. (a) Notwithstanding any other law, contracts awarded by
any state agency, department, officer, or other state governmental
entity, including school districts when they are expending state
funds for construction, professional services (except those subject
to Chapter 6 (commencing with Section 16850) of Part 3 of Division 4
of Title 2 of the Government Code), materials, supplies, equipment,
alteration, repair, or improvement shall have statewide participation
goals of not less than 3 percent for disabled veteran business
enterprises. These goals apply to the overall dollar amount
awarded and expended each year by the awarding department.
(b) For purposes of this section:
(1) "Broker" or "agent" means any individual or entity, or any
combination thereof, that does not have title, possession, control,
and risk of loss of materials, supplies, services, or equipment
provided to an awarding department, unless one or more certified
disabled veterans has 51-percent ownership of the quantity and value
of the materials, supplies, services, and of each piece of equipment
provided under the contract.
(2) "Equipment" means any piece of equipment that is used or
provided for rental to any state agency, department, officer, or
other state governmental entity, including equipment for which
operators are provided.
(3) "Equipment broker" means any broker or agent who rents
equipment to an awarding department.
(c) A disabled veteran business enterprise that rents equipment to
an awarding department shall be deemed to be an equipment broker
unless one or more disabled veterans has 51-percent ownership of the
quantity and the value of each piece of equipment. If the equipment
is owned by one or more disabled veterans, each disabled veteran
owner shall, prior to performance under any contract, submit to the
awarding department a declaration signed by the disabled veteran
owner stating that the owner is a disabled veteran and providing the
name, address, telephone number, and tax identification number of the
disabled veteran owner. Each disabled veteran owner shall submit his
or her federal income tax returns to the administering agency
pursuant to subdivision (g) as if he or she were a disabled veteran
business enterprise. The disabled veteran business enterprise of a
disabled veteran owner who fails to submit his or her tax returns
will be deemed to be an equipment broker.
(d) A disabled veteran business enterprise that rents equipment to
an awarding department shall, prior to performing the contract,
submit to the awarding department a declaration signed by each
disabled veteran owner and manager of the enterprise stating that the
enterprise obtained the contract by representing that the enterprise
was a disabled veteran business enterprise meeting and maintaining
all of the requirements of a disabled veteran business enterprise.
The declaration shall include the name, address, telephone number,
and tax identification number of the owner of each piece of equipment
identified in the contract.
(e) State funds expended for equipment rented from equipment
brokers pursuant to contracts awarded under this section shall not be
credited toward the 3-percent goal.
(f) A disabled veteran business enterprise that is a broker or
agent and that obtains a contract pursuant to subdivision (a) shall,
prior to performing the contract, disclose to the awarding department
that the business is a broker or agent. The disclosure shall be made
in a declaration signed and executed by each disabled veteran owner
and manager of the enterprise, declaring that the enterprise is a
broker or agent, and identifying the name, address, and telephone
number of the principal for whom the enterprise is acting as a broker
or agent.
(g) (1) A disabled veteran business enterprise, and each owner
thereof, shall, at the time of certification, submit to the
administering agency complete copies of the enterprise's federal
income tax returns for the three previous tax years.
(2) A disabled veteran business enterprise, and each owner
thereof, shall submit to the administering agency complete copies of
the enterprise's federal income tax returns that have a
postcertification due date, on or before the due date, including
extensions.
(3) A disabled veteran business enterprise that, and each owner
thereof who, has not submitted to the administering agency complete
copies of the enterprise's federal income tax returns for the three
tax years preceding certification nor for each postcertification tax
year for which a return was required to be filed, shall have 90 days
to submit those returns.
(4) A disabled veteran business enterprise that fails to comply
with any provision of this subdivision shall be prohibited from
participating in any state contract until the disabled veteran
business enterprise complies with the provisions of this subdivision.
Funds expended involving a disabled veteran business enterprise
during any period in which that enterprise is not in compliance with
the provisions of this subdivision shall not be credited toward the
awarding department's 3-percent goal.
(h) A disabled veteran business enterprise that fails to maintain
the certification requirements set forth in this article shall
immediately notify the awarding department and the administering
agency of that failure by filing a notice of failure that states with
particularity each requirement the disabled veteran business
enterprise has failed to maintain.
(i) In order to meet the 3-percent annual goal set forth in
subdivision (a), an awarding department shall consider whether
greater disabled veteran business enterprise participation in excess
of 3 percent should actually be required on contracts entered into
pursuant to this section for goods and services.
SEC. 3. Section 999.4 is added to the
Military and Veterans Code , to read:
999.4. A contractor that is not a disabled veteran business
enterprise that subcontracts with disabled veteran business
enterprises pursuant to this article shall, when submitting its
certification of expenditures to the awarding department, comply with
either of the following:
(a) Provide on the certification of expenditures to the awarding
department, the signature of any disabled veteran business enterprise
that performed work for the contractor acknowledging the
authenticity of the expenditures.
(b) Provide the certification of expenditures to any disabled
veteran business enterprise that performed work for the contractor
and proof of any amount of expenditures provided to that
subcontractor, such as by providing copies of checks issued to the
subcontractor or wire transfer notices.
SEC. 3. 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.
(b) (1) 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. Pursuant to that process, a
greater participation incentive shall be provided to the following:
(A) A prime contractor who owns a disabled veteran business
enterprise and who has not previously entered into any contracts
with the state as a prime contractor, rather than to a prime
contractor who commits to entering into subcontracts with disabled
veteran business enterprises.
(B) A disabled veteran business enterprise that employs a
workforce that is more than 50 percent veterans.
(C) A disabled veteran business enterprise that has not previously
entered into any contracts with the state.
(2) The incentive program shall be used by all state agencies when
awarding contracts.
(c) 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,
including a list that identifies the name, location, number, and type
of businesses by size and industry sector attending or participating
in a promotional effort.
(4) Establish a system to track the effectiveness of its efforts
to promote the California Disabled Veteran Business Enterprise
Program, which shall, at a minimum, include an annual comparison of
the list of businesses participating in promotional efforts during
the current and prior two years with the list of those businesses
that become newly certified as disabled veteran business enterprises
and those businesses that become a prime contractor or subcontractor
with the state under the program. The result of the annual comparison
shall be one performance measure as to the success of the
promotional activities.
(d) 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 does not meet and maintain the
certification requirements.
(e) 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.
(3) 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. 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) An awarding department shall maintain records of the
information provided by the prime contractor pursuant to subdivision
(e), including, but not limited to, the name of the prime contractor
and subcontractors under subdivision (e) and the amount awarded to,
and the amount paid to, each prime contractor and subcontractor under
subdivision (e). Awarding departments shall establish review
procedures to ensure the accuracy and completeness of the award
amounts and the paid amounts reported.
(g) 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.
(h) The administering agency shall adopt rules and regulations,
including standards for good faith efforts, for the purpose of
implementing this section. Emergency regulations consistent with this
section may be adopted.
(i) The records collected and maintained pursuant to subdivision
(f) shall be retained for a minimum of five years after collection.
SEC. 4. SEC. 5. Section 999.12 of
the Military and Veterans Code is amended to read:
999.12. Each awarding department shall appoint an agency Disabled
Veteran Business Enterprise Program Advocate. This person shall be
the same individual appointed pursuant to Section 14846 of the
Government Code. The agency Disabled Veteran Business Enterprise
Program Advocate shall do all of the following:
(a) Assist certified disabled veteran business enterprises in
participating in that agency's contracting process.
(b) Assist contract officers in seeking disabled veteran business
enterprises to participate in the agency's contract and procurement
activities by performing outreach efforts to recruit disabled veteran
business enterprises to offer their services as either a prime
contractor or subcontractor on any contract proposed by the awarding
department that requires disabled veteran business enterprise
participation, and by other feasible means.
(c) Meet regularly with the California Disabled Veteran Business
Enterprise Program Advocate and contract and procurement staffs of
their departments to disseminate information about the California
Disabled Veteran Business Enterprise Program.
(d) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency's contractors or
subcontractors.
(e) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.
(f) Coordinate and meet, on a regular basis, with the California
Disabled Veteran Business Enterprise Program Advocate at the
Department of Veterans Affairs in an effort to meet the statewide
3-percent goal provided for in Section 999.2.
(g) Maintain records of the promotional efforts hosted by, or
attended by, the advocate, including, but not limited to, a list that
identifies the name, location, number, and type of businesses by
size and industry sector attending or participating in an event. The
record shall also indicate any specific outcomes from the promotional
event, including, but not limited to, the number of disabled veteran
business enterprises who were certified and which disabled veteran
business enterprises entered in a state contract as either a prime
contractor or subcontractor for a contract awarded by his or her
agency within the two years following the promotional efforts hosted
or attended by the advocate.
SEC. 5. SEC. 6. 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 information
in subdivisions (a) to (f), inclusive:
(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 as a prime contractor or a subcontractor in
statewide contracting and the dollar values of contract award and the
amount of the contract paid 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) The department shall establish guidelines for reporting
multiyear contracts.