BILL ANALYSIS Ó
AB 2358
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Date of Hearing: March 30, 2016
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Cristina Garcia, Chair
AB 2358
(Bigelow) - As Introduced February 18, 2016
SUBJECT: Public contracts: small business contracts
SUMMARY: Increases the maximum amount for which a state agency
can directly contract with a certified small business (SB) or a
disabled veteran business enterprise (DVBE) from $250,000 to
$500,000.
EXISTING LAW:
1)Designates the Department of General Services (DGS) as the
lead purchasing and procurement agency for the State of
California.
2)Establishes the certified SB/DVBE option in state contracting,
which allows a state agency to award a contract for goods,
services, or information technology to a certified SB or DVBE
without complying with formal advertising and bidding
requirements if the following conditions are met:
a) The contract award is greater than $5,000 and less than
$250,000; and,
b) Quotes are obtained from two or more SBs or from two or
more DVBEs.
AB 2358
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FISCAL EFFECT: Unknown
COMMENTS: Under current law, certain state contracts with SBs
and DVBEs for goods, services, or information technology can
bypass formal competitive bidding requirements. Specifically,
state agencies are allowed to contract directly with a SB or
DVBE after obtaining price quotes from at least two firms before
awarding the contract. Contracts offered under this streamlined
SB/DVBE option are currently limited to between $5,000 and
$250,000 in value. This bill increases the maximum amount to
$500,000.
According to the author, "Adequate access to contract
opportunities for both small businesses and DVBEs is a continual
problem. This bill will allow small and veteran-owned
businesses to have more access to state agency contracts by
increasing the direct contracting limit from $250,000 to
$500,000."
DGS' most recent consolidated annual report notes that 22,674
contracts were awarded using the SB/DVBE option for fiscal year
2014-15. It is unclear whether or not increasing the maximum
contract value under the option to $500,000 will increase the
number of participating SB or DVBE firms. Hypothetically, state
agencies could, if they wish, pick specific firms with whom they
have done business before and invite them to make offers since
formal bidding requirements do not apply.
PRIOR LEGISLATION:
1)AB 1445 (Brown) of 2015 and SB 276 (Roth) of 2013 were both
substantively identical to this bill and held in the Assembly
and Senate Appropriations Committees, respectively.
2)AB 550 (Brown) of 2013 would have made a number of changes to
improve state procurement practices relating to SB and DVBE
AB 2358
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contract participation, including a provision substantively
identical to this bill. AB 550 was held in the Assembly
Appropriations Committee.
3)AB 31 (Price), Chapter 212, Statutes of 2009, includes, among
other provisions, the increase in the maximum threshold for
contracts under the SB/DVBE option from $100,000 to the
current $250,000 limit.
REGISTERED SUPPORT / OPPOSITION:
Support
Disabled Veteran Business Alliance (sponsor)
101 Telco Solutions, Inc.
Bayfish Creative Management
Burgess Innovation Management
CDS Consulting
CFR & Associates
CMG Alliance
CommTech Systems, Inc.
AB 2358
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Echelon Distribution
Global Blue DVBE
Global Environmental Network, Inc.
Golden State Framers Enterprises, Inc.
Granite Data Solutions
Katin Engineering Consulting
Mahan Insurance Brokers, Inc.
NSI Engineering
Office of the CIO
SCST Engineering, Inc.
SDV Services, Inc.
Supply Patriot
SystemLytics, LLC
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Vanguard Global Solutions
Vintage Elevator Services, Inc.
Opposition
None on file
Analysis Prepared by:Cassie Royce / A. & A.R. / (916) 319-3600