BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 733 (Block) - State Contracts: Disabled Veterans Business
Enterprise Statewide Participation Growth: Business Utilization
Plan Value
Amended: As Introduced Policy Vote: GO 11-0
Urgency: No Mandate: No
Hearing Date: April 22, 2013 Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 733 would make specified changes related to the
disabled veteran business enterprise (DVBE) program.
Fiscal Impact: The Department of General Services (DGS)
estimates that it would incur $50,000 in one-time costs and
require two positions ongoing to implement the provisions of the
bill (special funds). The one-time costs are related to (1)
rulemaking; (2) the development of forms, policies, and training
materials; (3) providing initial training to other state
departments on this new type of DVBE participation; and (4)
initial certifications and calculations for applicant firms.
Background: Established in 1989, the Disabled Veteran Business
Enterprise (DVBE) program sets a goal for most awarding state
departments to expend a minimum of three percent of their
overall contract dollars on DVBEs certified by DGS. Departments
that award contracts may meet this goal by either contracting
directly with certified DVBE firms or requiring winning bidders
to use them as subcontractors. To be eligible to become a
certified DVBE, a business must be at least 51% owned by a
disabled veteran, have its daily operations managed and
controlled by a disabled veteran, and be located in the United
States.
Current law allows an awarding department, as defined, to accept
submission of a DVBE business utilization plan (BUP) meeting
certain requirements to meet the three percent goal. A BUP is a
written commitment to contract with certified DVBEs for at least
three percent of a business' total contract dollars expended
within California during the next year, not just contracts with
the State. Failing to meet the commitment may both preclude a
SB 733 (Block)
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firm from doing business with the State for up to two years and
trigger monetary penalties.
Proposed Law: This bill would delete the provisions of current
law allowing departments to accept submission of a DVBE BUP, and
instead specifies that the statewide participation goal for
DVBEs may be met by the business utilization plan value of a
business utilization plan partner, as defined. Additionally, the
bill would (1) require DGS to certify persons meeting certain
requirements as a business utilization plan partner, and (2)
require a business utilization plan partner and a DVBE to report
information to DGS related to the business utilization plan
value, as defined.
Related Legislation: SB 722 (Correa), would define "disabled
veteran" for purposes of the DVBE program, as a veteran of the
Armed Forces of the United States, as specified, who has a
service-connected disability, as documented by a letter from any
branch of the United States Armed Forces or the federal
Department of Veterans Affairs, and who is domiciled in the
State.
SB 297 This bill would increase the annual statewide
participation goal for disabled veteran business enterprises
(DVBEs), applicable to specified state contacts, from three
percent to five percent.
Staff Comments: The current BUP option to meet the three percent
goal for DVBEs has been in place for 10 years, and has been used
only one time. Because of the time and commitment associated
with the preparation and submission of a BUP, most contractors
instead choose to fulfill the DVBE requirement each time they
bid on a contract.