BILL ANALYSIS Ó
AB 1218
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1218 (Weber) - As Amended April 23, 2015
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|Policy |Jobs, Economic Development, |Vote:|8 - 0 |
|Committee: |and the Economy | | |
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| |Accountability and | |9 - 0 |
| |Administrative Review | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill expands the existing 3% statewide participation goal
for disabled veteran business enterprises (DVBEs) in state
contracting to include reporting to the Department of General
AB 1218
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Services (DGS) of the overall dollar amount awarded by state
departments each year to DVBEs and makes other program
modifications. Specifically, this bill:
1)Modifies the existing DVBE incentive program to provide for a
higher incentive when the bid comes a prime contractor who
owns a DVBE; a DVBE that employs a workforce that is more than
50% veterans; or a DVBE that has not previously entered into
any contracts with the state.
2)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.
3)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.
4)Revises the information that DGS is already required to report
on DVBE contracting activity to include the level of
participation, by agency, of DVBEs as a prime contractor or a
subcontractor in statewide contracting; and, the dollar value
of the contract award and the amount of the contract paid.
5)Directs DGS to establish guidelines for reporting multiyear
contracts.
FISCAL EFFECT:
1)Ongoing General Fund costs of approximately $430,000 for DGS
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workload related to reporting requirements for awarding
departments. DGS anticipates at least two staff would be
needed to enter, analyze, and evaluate the information DGS
receives. Further, DGS indicates they may need to contract for
the design of an IT solution to analyze the data. While DGS
would need to conduct a formal analysis, it is not unlikely a
data system would result in costs of approximately $1 million
to $2 million. Absent an IT system, this information would
have to be tracked manually on a spreadsheet and would result
in increased staffing costs.
2)Minor/absorbable costs for DGS to collect the amounts awarded
and paid to DVBE prime contractors and subcontractors, and to
engage in the rulemaking process.
COMMENTS:
Purpose. The California Disabled Veteran Business Enterprise
Program, administered by DGS, was established to address the
special needs of disabled veterans seeking rehabilitation and
training through entrepreneurship, and to recognize the
sacrifices California's disabled veterans made during their
military service.
According to the author, this bill aims to address the
deficiencies identified a 2014 Commission on State Auditor
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
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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.
Analysis Prepared by:Misty Feusahrens / APPR. / (916)
319-2081