BILL ANALYSIS �
SB 719
Page 1
Date of Hearing: August 14, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 719 (Correa) - As Amended: April 17, 2013
Policy Committee: Veterans
AffairsVote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill modifies reporting requirements for state departments
regarding the California Disabled Veteran Business Enterprise
(DVBE) procurement program by requiring each department that
adopts and uses the Financial Information System for California
(FI$Cal) system to report its "statewide participation goals" to
the Department of General Services (DGS) in terms of the overall
dollar amount expended each year by the awarding department.
(Current practice is for departments to report DVBE
participation in the manner most feasible.)
FISCAL EFFECT
1)One-time GF and special fund costs to DGS in the range of
$150,000 for the equivalent of 1.5 personnel years to revise
policies in the State Contracting Manual and the California
Procurement and Contracting Academy, and to provide training
to state departments.
2)Significant cumulative costs, potentially in excess of $3
million, to state departments to transition to the reporting
process prescribed by this bill. Assuming an average cost of
$20,000 per 180 reporting state departments, as FI$CaL is
phased in through 2016, costs would be about $3.6 million.
COMMENTS
1)Rationale . The author's intent is to standardize DVBE
reporting to gain a more accurate picture of state DVBE
participation.
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In August 2012, the Senate Veterans Affairs Committee held a
hearing on the DVBE Program. Testimony from DGS indicated the
State's recent positive DVBE record reflects a mix of
nonstandardized data from various agencies. The mix includes
reporting from some agencies based on dollar amounts expressed
up-front in DVBE contracts, while reporting from other
agencies was based on dollar amounts actually paid to the
DVBEs under those contracts. Since the purpose of the program
is to provide economic assistance to disabled veterans, the
most accurate measure would be the amount of actual awards
paid out, as proposed by SB 719.
2)DVBE . Current law requires state departments to attempt to
award at least 3% of their annual contract dollars to
certified DVBEs. Departments decide whether to include the
DVBE participation requirements in a particular solicitation,
so some contracts have a goal of more than 3%, while some may
have a smaller - or no - DVBE participation goal. DGS is the
administering agency for the DVBE program.
According to DGS, the DVBE statewide participation rate was
almost 5% the past two fiscal years. DGS reported in its
2010-11 Statewide Consolidated Annual Report that at the close
of the fiscal year, there were 1,211 certified DVBEs. In
2010-11, state agencies reported about $5.6 billion in
contracts for procurement of goods, services, construction,
and information technology goods and services.
DGS notes this bill will not improve state DVBE participation
rate.
3)FI$Cal is an information technology project administered by
the Department of Finance, the State Controller's Office, the
State Treasurer's Office, and DGS. FI$Cal will replace the
state's multiple aging and disparate financial systems with a
centralized, fully integrated, modern financial information
system for the entire state, and will include budgeting,
accounting, procurement, and cash management functions. The
phase-in is scheduled to begin this summer and conclude in
2016.
4)Related Legislation .
a) SB 276 (Roth), 2013, would raise the upper limit of
SB 719
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contracts that may be awarded to small businesses and DVBEs
from $250,000 to $500,000. This bill was held on the Sen.
Appropriations Suspense File.
b) SB 297 (Roth), 2013, would increase the DVBE program's
annual statewide participation goals for state agencies
from 3% up to 5%. This bill is pending in the Assembly
Jobs, Economic Development and the Economy Committee, and
has been double-referred to the Accountability and
Administrative Review Committee.
c) SB 733 (Block), 2013, would establish new criteria for
DVBEs, regarding business utilization plans. This bill is
pending in the Assembly Jobs, Economic Development and the
Economy Committee, and has been double-referred to the
Veterans Affairs Committee.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081