BILL ANALYSIS Ó
AB 1218
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Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Rudy Salas, Chair
AB 1218
(Weber) - As Amended April 23, 2015
SUBJECT: Public contracts: disabled veteran business
enterprise
SUMMARY: Makes various changes to the statewide disabled
veteran business enterprises (DVBE) contracting program
administered by the Department of General Services (DGS).
Specifically, this bill:
1)Expands the existing 3% statewide participation goal for DVBEs
in state contracting to include reporting to DGS of the
overall dollar amount awarded by state departments each year
to DVBEs.
2)Modifies the existing DVBE incentive program to provide for a
higher incentive when the bid comes from any of the following:
a) A prime contractor who owns a DVBE;
b) A DVBE that employs a workforce that is more than 50%
veterans; or,
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c) A DVBE that has not previously entered into any
contracts with the state.
3)Requires the California Department of Veterans Affairs
(CalVet) to establish a system for tracking the effectiveness
of its efforts to promote the DVBE program and maintain
complete records of its promotional events, as specified.
4)Requires departments that award DVBE contracts to retain DVBE
payment records for at least five years and establish review
procedures to ensure the accuracy and completeness of the
records.
5)Revises the information that DGS is already required to report
on DVBE contracting activity to include the following:
a) The level of participation, by agency, of DVBEs as a
prime contractor or a subcontractor in statewide
contracting; and,
b) The dollar value of the contract award and the amount of
the contract paid.
6)Directs DGS to establish guidelines for reporting multiyear
contracts.
EXISTING LAW:
1)Establishes the DVBE program for the purposes of addressing
the special needs of disabled veterans seeking rehabilitation
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and training through entrepreneurship, and recognizing the
sacrifices California's disabled veterans made during their
military service.
2)Requires state departments to implement a goal of awarding at
least 3% of their annual contract dollars to DVBEs. The goal
applies to the overall dollar amount expended each year by the
awarding department.
3)Requires DGS to collect information from awarding departments
on the level of DVBE participation in state contracting. This
information is known as the Statewide Consolidated Annual
Report and posted on DGS' website.
FISCAL EFFECT: Unknown
COMMENTS: According to the author, "As California works to
address the employment needs of the latest cohort of veterans
from recent conflicts, it is time to revisit the DVBE program to
ensure that it works as intended and provides greater access to
new entrepreneurial ventures."
The author cites a February 2014 review of the DVBE program by
the California State Auditor (CSA) which found that departments
were using the less accurate measure of the contract amount
awarded to a DVBE, rather than actual amount paid, as a measure
of performance toward the required 3% goal. Additionally, the
author notes that the CSA report specified that only about 2% of
1,400 DVBE firms received 83% of the total spent on DVBE
contracts.
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This bill aims to address the deficiencies identified in the CSA
report by providing bid preferences for new DVBEs and those
seeking to become prime contractors; ensuring more accuracy in
meeting the statewide 3% goal by requiring both the contract
value and the actual amount DVBEs receive to be reported; and,
mandating outcome-based measurements of DVBE recruitments
efforts. These changes are intended to increase the number of
participating DVBEs and improve the program's accountability.
DOUBLE REFERRAL: This measure was previously heard in the
Assembly Jobs, Economic Development and the Economy Committee on
April 21, 2015, with a vote of 8-0.
REGISTERED SUPPORT / OPPOSITION:
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
American Legion-Department of California
American Veterans-Department of California
Military Officers Association of America, California Council
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Vietnam Veterans of America-California State Council
Opposition
None on file
Analysis Prepared by:Cassie Royce / A. & A.R. / (916) 319-3600