Small business liaison: contract information: small business procurement participation., the official text

An act to amend Section 14838 of, and to add Section 11148.5.1 to, the Government Code, and to amend Section 999.10 of the Military and Veterans Code, relating to businesses.

LEGISLATIVE COUNSEL'S DIGEST

Existing law establishes the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development, led by the Small Business Advocate, and sets forth its powers and duties relating to advocacy on behalf of small businesses and providing small businesses with the information they need to survive in the marketplace.
Existing law requires a state agency that significantly regulates small business or that significantly impacts small business to designate at least one person to serve as a small business liaison for the agency. Existing law requires these state agencies to notify the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development and the Department of General Services of specified information, including the name and contact information of the agency’s small business liaison.
This bill would require the small business liaison for each state agency to annually submit specified contract information to the Office of Small Business Advocate, including, among other things, a list of all contracts of the state agency that include a subcontract with a small business. The bill would require the Office of Small Business Advocate to post that contract information on its internet website.
Existing law requires the directors of state departments and other agencies that enter into contracts for the provision of goods, information technology, and services to the state, and in the construction, including alteration, demolition, repair, or improvement, of state facilities to, among other things, establish a minimum goal for procurement participation for small businesses, provide for small business preference, and give special consideration and assistance to small businesses, as specified.
This bill would require a contractor awarded a state contract pursuant to these provisions to utilize the listed small business or microbusiness subcontractor identified in a bid proposal for goods and services specified in a contract described above unless otherwise approved by the awarding state agency. The bill would prohibit a contractor awarded a state contract pursuant to these provisions from substituting, replacing, or terminating a listed small business or microbusiness subcontractor without approval of the awarding state agency or department. The bill would require an awarding state department or agency, upon the completion of an awarded contract for which a commitment to achieve a small business goal was made, to require the prime contractor that entered into a subcontract with a small business to certify certain information including, among other things, that all payments under the contract have been made to the small business, and require the prime contractor, upon request by the awarding state department or agency, to provide proof of payment for the work. By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.
Existing law, the California Disabled Veteran Business Enterprise Program, sets disabled veteran business enterprise statewide participation goals of a minimum of 3 % of total contract value expended each year for contracts awarded by any state agency, department, officer, or other state governmental entity, as specified.
This bill would require a contractor awarded a state contract pursuant to the program to utilize the listed disabled veteran business enterprise subcontractor identified in a bid proposal for goods and services specified in the contract unless otherwise approved by the awarding state agency. The bill would prohibit a contractor awarded a state contract pursuant to the program from substituting, replacing, or terminating a listed disabled veteran business enterprise subcontractor without approval of the awarding state agency or department.
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.

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

SECTION 1.
Section 11148.5.1 is added to the Government Code, to read:
11148.5.1.
(a) The small business liaison for each state agency shall annually submit the following information to the Office of Small Business Advocate:
(1) (A) A list of all current contracts between the state agency and a small business.
(B) A list of all contracts of the state agency that include a subcontract with a small business.
(2) The total dollar amount of each contract, as described in paragraph (1).
(3) The total dollar amount paid to a small business under a contract or subcontract, as described in paragraph (1).
(b) The Office of Small Business Advocate shall post the information received pursuant to subdivision (a) on its internet website.

SEC. 2.
Section 14838 of the Government Code is amended to read:
14838.
In order to facilitate the participation of small business, including microbusiness, in the provision of goods, information technology, and services to the state, and in the construction, including alteration, demolition, repair, or improvement, of state facilities, the directors of the department and other state agencies that enter those contracts, each within their respective areas of responsibility, shall do all of the following:
(a) Establish a minimum goal of 25 percent procurement participation for small businesses, including microbusinesses, in the provision of goods, information technology, and services to the state, and in the construction of state facilities.
(b) Provide for small business preference, or nonsmall business preference for bidders that provide for small business and microbusiness subcontractor participation, in the award of contracts for goods, information technology, services, and construction, as follows:
(1) In solicitations where an award is to be made to the lowest responsible bidder meeting specifications, the preference to small business and microbusiness shall be 5 percent of the lowest responsible bidder meeting specifications. The preference to nonsmall business bidders that provide for small business or microbusiness subcontractor participation shall be, up to a maximum of 5 percent of the lowest responsible bidder meeting specifications, determined according to rules and regulations established by the Department of General Services.
(2) In solicitations where an award is to be made to the highest scored bidder based on evaluation factors in addition to price, the preference to small business or microbusiness shall be 5 percent of the highest responsible bidder’s total score. The preference to nonsmall business bidders that provide for small business or microbusiness subcontractor participation shall be up to a maximum 5 percent of the highest responsible bidder’s total score, determined according to rules and regulations established by the Department of General Services.
(3) The preferences under paragraphs (1) and (2) shall not be awarded to a noncompliant bidder and shall not be used to achieve any applicable minimum requirements.
(4) The preference under paragraph (1) shall not exceed fifty thousand dollars ($50,000) for any bid, and the combined cost of preferences granted pursuant to paragraph (1) and any other provision of law shall not exceed one hundred thousand dollars ($100,000). In bids in which the state has reserved the right to make multiple awards, this fifty-thousand-dollar ($50,000) maximum preference cost shall be applied, to the extent possible, so as to maximize the dollar participation of small businesses, including microbusinesses, in the contract award.
(c) Give special consideration to small businesses and microbusinesses, by both:
(1) Reducing the experience required.
(2) Reducing the level of inventory normally required.
(d) Give special assistance to small businesses and microbusinesses in the preparation and submission of the information requested in Section 14310.
(e) Under the authorization granted in Section 10163 of the Public Contract Code, make awards, whenever feasible, to small business and microbusiness bidders for each project bid upon within their prequalification rating. This may be accomplished by dividing major projects into subprojects so as to allow a small business or microbusiness contractor to qualify to bid on these subprojects.
(f) Make continuous efforts to expand the pool of small businesses and microbusinesses that participate in the department’s and other state agencies’ contracts by regularly seeking out and identifying small businesses and microbusinesses that have not previously done business with the department or other state agency or that are not regularly used by the department or other state agency, and including those small businesses and microbusinesses in the agency’s solicitations.
(g) (1) A contractor awarded a state contract pursuant to this section shall utilize the listed small business or microbusiness subcontractor identified in a bid proposal for goods and services specified in the contract unless otherwise approved by the awarding state department or agency.
(2) A contractor awarded a state contract pursuant to this section shall not substitute, replace, or terminate a listed small business or microbusiness subcontractor without approval of the awarding state department or agency.
(h) Small business and microbusiness bidders qualified in accordance with this chapter shall have precedence over nonsmall business bidders in that the application of a bidder preference for which nonsmall business bidders may be eligible under this section or any other provision of law shall not result in the denial of the award to a small business or microbusiness bidder. In the event of a precise tie between the low responsible bid of a bidder meeting specifications of a small business or microbusiness, and the low responsible bid of a bidder meeting the specifications of a disabled veteran-owned small business or microbusiness, the contract shall be awarded to the disabled veteran-owned small business or microbusiness. This provision applies if the small business or microbusiness bidder is the lowest responsible bidder, as well as if the small business or microbusiness bidder is eligible for award as the result of application of the small business and microbusiness bidder preference granted by subdivision (b).
(i) If the directors of the department and other state agencies that enter into those contracts are unable to reach the goals established under subdivision (a) in the year in which the changes made by the act that added this subdivision become operative, the directors of the department and other state agencies may count towards that goal, contracts with firms that would be considered a small business or microbusiness under the amendments made to Section 14837 by the act adding this subdivision. This subdivision shall become operative on January 1, 2019.
(j) Upon completion of an awarded contract for which a commitment to achieve a small business goal was made, an awarding state department or agency shall require the prime contractor that entered into a subcontract with a small business to certify to the awarding department or agency all of the following:
(1) The total amount the prime contractor received under the contract.
(2) The name and address of the small business 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 small businesses under the requirements of the contract and the amount each small business received from the prime contractor.
(4) That all payments under the contract have been made to the small business. Upon request by the awarding state department or agency, the prime contractor shall provide proof of payment for the work.

SEC. 3.
Section 999.10 of the Military and Veterans Code is amended to read:
999.10.
(a) 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 a person making a bid or offer to perform a contract shall, in the bid or offer, set forth the following information:
(1) The name, disabled veteran business enterprise certification number, contact information, and the location of the place of business of each subcontractor certified as a disabled veteran business enterprise who 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 disabled veteran business enterprise participation goals.
(2) The portion of work that will be done by each subcontractor under paragraph (1). Except in cases of emergency when a contract is necessary for the immediate preservation of the public health, welfare, or safety, or protection of state property, the prime contractor shall list only one subcontractor for each portion of work as is defined by the prime contractor in the contractor’s bid or offer.
(3) A certification, signed under penalty of perjury, that the portion of work that will be done by each subcontractor under paragraph (1) serves a commercially useful function, as defined in clause (i) of subparagraph (B) of paragraph (5) of subdivision (b) of Section 999.
(b) A contractor awarded a state contract pursuant to this article shall utilize the listed disabled veteran business enterprise subcontractor identified in a bid proposal for goods and services specified in the contract unless otherwise approved by the awarding state department or agency.
(c) A contractor awarded a state contract pursuant to this article shall not substitute, replace, or terminate a listed disabled veteran business enterprise subcontractor without approval of the awarding state department or agency.
(d) The Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code) shall apply to the information required by subdivision (a) relating to subcontractors certified as disabled veteran business enterprises.
(e) For purposes of this section, “subcontractor” and “prime contractor” shall have the same meaning as those terms are defined in Section 4113 of the Public Contract Code.
(f) As used in this section, “contract” does not include a contract negotiated pursuant to Chapter 10 (commencing with Section 4525) of Division 5 of Title 1 of the Government Code.

SEC. 4.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.