AB 2905, as amended, Committee on Jobs, Economic Development, and the Economy. Public contracting: small business goal.
Existing law requires the Director of the Department of General Services and the directors of other state agencies to establish goals for the participation of small businesses, including microbusinesses, in the provision of goods, information technology, and services to the state, and in the construction of state facilities.
This bill would state the intent of the Legislature to set and implement a 25% small business participation goal for state procurement and contracting.
Existing law requires each state agency that was awarded any contract financed with the proceeds of the infrastructure-related bond acts of 2006 in the previous fiscal year to report to the Director of General Services statistics comparing the small business and microbusiness participation dollars for contracts funded by these bonds to the total contract dollars for contracts funded by the bonds.
This bill would require that the goals established by the agency director for the participation of small businesses, as described above, be reported to the director in that report.
Existing law requires the department to make available a report on contracting that contains information on the level of participation by small businesses in state contracting.
The bill would also require the goals established by the director for the participation of small businesses, as described above, to be included in that report. The bill would also
begin delete require that,end delete to the extent feasible, beginning begin delete in 2018,end delete that specified information in the report about the participation of small businesses be provided by prime contractor and subcontractor, separately. The bill would define subcontractor and prime contractor for purposes of these provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
(a) The Legislature finds and declares all of the
3(1) California’s dominance in many economic areas is based,
4in part, on the significant role small businesses play in the state’s
5$2.3 trillion economy.
6(2) Business owners with no employees make up the single
7largest component of businesses in California, 2.8 million out of
8an estimated 3.5 million businesses in 2010.
9(3) Nearly 90 percent of all businesses with employees have
10fewer than 20 employees, employing 37 percent of all workers in
12(4) Research by the United States Census Bureau and the Ewing
13Marion Kauffman Foundation confirm that job growth is greater
14among businesses with fewer than 20 employees.
P3 1(5) California’s nonemployer and small employer firms create
2jobs, generate tax revenue, and revitalize communities.
3(b) It is the intent of the Legislature that the state set and
4implement a 25 percent small business participation goal for state
5procurement and contracting.
Section 14838 of the Government Code is amended
In order to facilitate the participation of small business,
9including microbusiness, in the provision of goods, information
10technology, and services to the state, and in the construction,
11including alteration, demolition, repair, or improvement, of state
12facilities, the directors of the department and other state agencies
13that enter those contracts, each within their respective areas of
14responsibility, shall do all of the following:
15(a) Establish goals, consistent with those established by the
16Office of Small Business Certification and Resources, for the extent
17of participation of small businesses, including microbusinesses,
18in the provision of goods, information technology, and services to
19the state, and in the construction of state facilities. Each state
20agency that is required to make a report to the Director of General
21Services pursuant to subdivision (f) of Section 14838.1 shall
22include the goals in its report. The director shall also include the
23goals in the department report made pursuant to Section 10111 of
24the Public Contract Code.
25(b) Provide for small business preference, or nonsmall business
26preference for bidders that provide for small business and
27microbusiness subcontractor participation, in the award of contracts
28for goods, information technology, services, and construction, as
30(1) In solicitations where an award is to be made to the lowest
31responsible bidder meeting specifications, the preference to small
32business and microbusiness shall be 5 percent of the lowest
33responsible bidder meeting specifications. The preference to
34nonsmall business bidders that provide for small business or
35microbusiness subcontractor participation shall be, up to a
36maximum of 5 percent of the lowest responsible bidder meeting
37specifications, determined according to rules and regulations
38established by the Department of General Services.
39(2) In solicitations where an award is to be made to the highest
40scored bidder based on evaluation factors in addition to price, the
P4 1preference to small business or microbusiness shall be 5 percent
2of the highest responsible bidder’s total score. The preference to
3nonsmall business bidders that provide for small business or
4microbusiness subcontractor participation shall be up to a
5maximum 5 percent of the highest responsible bidder’s total score,
6determined according to rules and regulations established by the
7Department of General Services.
8(3) The preferences under paragraphs (1) and (2) shall not be
9awarded to a noncompliant bidder and shall not be used to achieve
10any applicable minimum requirements.
11(4) The preference under paragraph (1) shall not exceed fifty
12thousand dollars ($50,000) for any bid, and the combined cost of
13preferences granted pursuant to paragraph (1) and any other
14provision of law shall not exceed one hundred thousand dollars
15($100,000). In bids in which the state has reserved the right to
16make multiple awards, this fifty thousand dollar ($50,000)
17maximum preference cost shall be applied, to the extent possible,
18so as to maximize the dollar participation of small businesses,
19including microbusinesses, in the contract award.
20(c) Give special consideration to small businesses and
21microbusinesses by both:
22(1) Reducing the experience required.
23(2) Reducing the level of inventory normally required.
24(d) Give special assistance to small businesses and
25microbusinesses in the preparation and submission of the
26information requested in Section 14310.
27(e) Under the authorization granted in Section 10163 of the
28Public Contract Code, make awards, whenever feasible, to small
29business and microbusiness bidders for each project bid upon
30within their prequalification rating. This may be accomplished by
31dividing major projects into subprojects so as to allow a small
32business or microbusiness contractor to qualify to bid on these
34(f) Small business and microbusiness bidders qualified in
35accordance with this chapter shall have precedence over nonsmall
36business bidders in that the application of a bidder preference for
37which nonsmall business bidders may be eligible under this section
38or any other provision of law shall not result in the denial of the
39award to a small business or microbusiness bidder. In the event of
40a precise tie between the low responsible bid of a bidder meeting
P5 1specifications of a small business or microbusiness, and the low
2responsible bid of a bidder meeting the specifications of a disabled
3veteran-owned small business or microbusiness, the contract shall
4be awarded to the disabled veteran-owned small business or
5microbusiness. This provision applies if the small business or
6microbusiness bidder is the lowest responsible bidder, as well as
7if the small business or microbusiness bidder is eligible for award
8as the result of application of the small business and microbusiness
9bidder preference granted by subdivision (b).
Section 10111 of the Public Contract Code is amended
Commencing January 1, 2007, the department shall
13make available a report on contracting activity containing the
15(a) A listing of consulting services contracts that the state has
16entered into during the previous fiscal year. The listing shall
17include the following:
18(1) The name and identification number of each contractor.
19(2) The type of bidding entered into, the number of bidders,
20whether the low bidder was accepted, and if the low bidder was
21not accepted, an explanation of why another contractor was
23(3) The amount of the contract price.
24(4) Whether the contract was a noncompetitive bid contract,
25and why the contract was a noncompetitive bid contract.
26(5) Justification for entering into each consulting services
28(6) The purpose of the contract and the potential beneficiaries.
29(7) The date when the initial contract was signed, and the date
30when the work began and was completed.
31(b) The report shall also include a separate listing of consultant
32contracts completed during that fiscal year, with the same
33information specified in subdivision (a).
34(c) The information specified in subdivisions (a) and (b) shall
35also include a list of any contracts underway during that fiscal year
36on which a change was made regarding the following:
37(1) The completion date of the contract.
38(2) The amount of money to be received by the contractor, if it
39exceeds 3 percent of the original contract price.
P6 1(3) The purpose of the contract or duties of the contractor. A
2brief explanation shall be given if the change in purpose is
4(d) The level of participation, by agency, of disabled veteran
5business enterprises in statewide contracting and shall include
6dollar values of contract award for the following categories:
8(2) Architectural, engineering, and other professional services.
9(3) Procurement of materials, supplies, and equipment.
10(4) Information technology procurements.
11Additionally, the report shall include a statistical summary
12detailing each awarding department’s goal achievement and a
13statewide total of those goals.
14(e) The level of participation by small business in state
16(1) Upon request, an up-to-date list of eligible small business
17bidders by general procurement and construction contract
18categories, noting company names and addresses and also noting
19which small businesses also qualify as microbusinesses.
20(2) (A) By general procurement and construction contract
21categories, statistics comparing the small business and
22microbusiness contract participation dollars to the total state
23contract participation dollars.
24(B) To the extent feasible, beginning
begin delete in 2018,end delete the information required to be included pursuant to
27subparagraph (A) also shall be provided by prime contractor and
29(3) (A) By awarding department and general procurement and
30construction categories, statistics comparing the small business
31and microbusiness contract participation dollars to the total state
32contract participation dollars.
33(B) To the extent feasible, beginning
begin delete in 2018,end delete the information required to be included pursuant to
36subparagraph (A) also shall be provided by prime contractor and
38(4) Any recommendations for changes in statutes or state
39policies to improve opportunities for small businesses and
P7 1(5) A statistical summary of small businesses and
2microbusinesses certified for state contracting by the number of
3employees at the business for each of the following categories:
begin delete 6-20, 21-50, and 51end delete to 100.
5(6) To the extent feasible, beginning
begin delete in the year 2008,end delete the number of contracts awarded by the department in
8the categories specified in paragraph (5).
9(7) The number of contracts and dollar amounts awarded
10annually pursuant to Section 14838.5 of the Government Code to
11small businesses, microbusinesses, and disabled veteran business
13(f) The level of participation of business enterprises, by race,
14ethnicity, and gender of the owner, in contracts to the extent that
15the information has been voluntarily reported to the department.
16 In addition, the report shall contain the levels of participation of
17business enterprises, by race, ethnicity, and gender of the owner,
18and whether the business is a lesbian, gay, bisexual, or transgender
19owned business for the following categories of contracts, to the
20extent that the information has been voluntarily reported to the
23(2) Purchases of materials, supplies, or equipment.
24(3) Professional services.
25(g) For purposes of this section, “subcontractor” and “prime
26contractor” shall have the same meaning as those terms are defined
27in Section 4113.
28(h) The amendments made to this section by Chapter 861 of the
29Statutes of 2012 shall apply on and after January 1, 2013.