BILL ANALYSIS �
Bill No: SB
733
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
SB 733 Author: Block
As Introduced: February 22, 2013
Hearing Date: April 9, 2013
Consultant: Paul Donahue
SUBJECT
State contracts: Disabled veteran business enterprise
statewide participation goals; Business utilization plan
value.
EXISTING LAW
1)Establishes a 3% statewide participation goal for
disabled veteran business enterprises (DVBE) for
contracts awarded by any state agency when they are
expending state funds for construction, professional
services, materials, supplies, equipment, alteration,
repair, or improvement. These goals apply to the overall
dollar amount expended each year by the awarding
department.
2)Requires an awarding department to award the contract to
the lowest responsible bidder meeting specified statewide
participation goals for DVBEs.
3)Allows an awarding department to accept submission of a
DVBE utilization plan meeting certain requirements to
meet this goal, as specified.
DESCRIPTION
1)Deletes provisions of law allowing an awarding department
to accept submission of a DVBE utilization plan.
SB 733 (Block) continued
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2)Specifies instead that the statewide participation goal
for DVBEs may be met by the business utilization plan
value of a business utilization plan partner, as defined,
established by payments between the partner and a DVBE,
as specified.
3)Requires the Department of General Services (DGS) to
certify persons meeting certain requirements as a
business utilization plan partner, as defined, and would
require a business utilization plan partner and a DVBE to
report information relating to the business utilization
plan value.
BACKGROUND
1) Purpose of the bill : The author notes that current law
contains a number of requirements for certification of
utilization plans such that, in the ten years that the
business utilization plan option has been in place under
current law, only one has ever actually been established.
In this bill the author intends to "streamline the
cumbersome process in current law required for a
utilization plan to be developed and approved by delegating
to the Department of General Services authority to
establish the minimum parameters necessary for a business
utilization plan to meet the goals of the DVBE program
while maintaining its integrity."
"It creates the flexibility the department needs to certify
the business utilization plans that prime contract is
required to submit to be a business utilization plan
partner. Streamlining the process creates an incentive for
prime contractors to hire more DVBEs, as SB 733 creates
more opportunities for DVBE participants to serve as
subcontractors in state contracting. This will be an
essential support element because pending major
infrastructure programs like the High Speed Rail and Delta
Restoration projects, which contain or may contain the 3%
DVBE participation requirement, depend heavily on prime
contractors to hire DVBEs as subcontractors. The
streamlined business utilization plan process will help
these contractors meet the DVBE goals, especially when, for
certain key tasks, qualified DVBEs may not be available."
2) Support : Supporters state that this bill will permit
SB 733 (Block) continued
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prime contractors seeking to hire qualified DVBEs to meet
DVBE goals by including indirect DVBE subcontracting work
in support of fulfillment of the contract. Supporters in
the construction industry express concern regarding the
availability of DVBEs and the need to have additional
hiring options. They believe this measure addresses this
issue by providing additional options for contractors to
hire non-construction disabled veteran owned businesses and
to have the payments of those businesses apply toward
meeting the 3% goal.
PRIOR/RELATED LEGISLATION
SB 548 (Huff) Chapter 595, Statutes of 2009. Required an
awarding department, upon completion of an awarded contract
for which a commitment to achieve a DVBE goal was made, to
require the prime contractor that entered into a
subcontract with a DVBE to certify to the awarding
department certain information pertaining to the contract,
and that all payments under the contract have been made to
the DVBE.
SB 115 (Florez) Chapter 451, Statutes of 2005. Enacted
various changes to the DVBE program. Requires DGS to
establish a DVBE participation incentive to bidders that is
mandatory for all state agencies, and required the
Department of Veterans Affairs to establish a method of
monitoring adherence to the DVBE participation goals.
SB 1008 (Machado) Chapter 632, Statutes of 2004. Among
other things, strengthened the sanctions that can be levied
against businesses that fraudulently misrepresent their
eligibility for DVBE certification.
SUPPORT:
Disabled Veterans Business Alliance
Associated General Contractors of California
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
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