BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 733|
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THIRD READING
Bill No: SB 733
Author: Block (D)
Amended: As introduced
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 4/9/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,
De Le�n, Galgiani, Hernandez, Lieu, Padilla
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : State contracts: disabled veteran business
enterprise statewide participation goals: business utilization
plan value
SOURCE : Author
DIGEST : This bill deletes provisions of law allowing an
awarding department to accept submission of a disabled veteran
business enterprise (DVBE) utilization plan to meet the 3%
statewide participation goal for DVBE awarded contracts.
ANALYSIS :
Existing law:
1. Establishes a 3% statewide participation goal for a DVBE for
contracts awarded by any state agency when they are expending
state funds for construction, professional services,
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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.
This bill:
1. Deletes provisions of law allowing an awarding department to
accept submission of a DVBE utilization plan to meet the 3%
statewide participation goal for DVBE awarded contracts.
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 requires a business
utilization plan partner and a DVBE to report information
relating to the business utilization plan value.
Comments
The author's office notes that existing law contains a number of
requirements for certification of utilization plans such that,
in the 10 years that the business utilization plan option has
been in place under existing 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.
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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."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, DGS estimates
that it will incur $50,000 in one-time costs and require two
positions ongoing to implement the provisions of this 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.
SUPPORT : (Verified 5/23/13)
Disabled Veterans Business Alliance
Associated General Contractors of California
ARGUMENTS IN SUPPORT : Supporters state that this bill will
permit 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 bill 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.
MW:d 5/24/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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