BILL NUMBER: AB 2905 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 12, 2016
INTRODUCED BY Committee on Jobs, Economic Development, and the
Economy (Assembly Members Eduardo Garcia (Chair), Kim (Vice Chair),
Brown, Chu, Gipson, and Mathis)
MARCH 7, 2016
An act to amend Section 14838 of the Government Code, and to amend
Section 10111 of the Public Contract Code, relating to public
contracting.
LEGISLATIVE COUNSEL'S DIGEST
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 require that,
require, to the extent feasible, beginning
in 2018, with the report issued in 2018 cov
ering contracting activity in the 2017-18 fiscal year,
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. The bill
would also revise the categories, defined by the number of employees,
by which a statistical summary relating to small and microbusinesses
is required to be reported, and, to the extent feasible, beginning
with the report issued in 2018 covering contracting activity in the
2017-18 fiscal year, the number of contracts awarded by the
department in those categories.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares all of the
following:
(1) California's dominance in many economic areas is based, in
part, on the significant role small businesses play in the state's
$2.3 trillion economy.
(2) Business owners with no employees make up the single largest
component of businesses in California, 2.8 million out of an
estimated 3.5 million businesses in 2010.
(3) Nearly 90 percent of all businesses with employees have fewer
than 20 employees, employing 37 percent of all workers in 2012.
(4) Research by the United States Census Bureau and the Ewing
Marion Kauffman Foundation confirm that job growth is greater among
businesses with fewer than 20 employees.
(5) California's nonemployer and small employer firms create jobs,
generate tax revenue, and revitalize communities.
(b) It is the intent of the Legislature that the state set and
implement a 25 percent small business participation goal for state
procurement and contracting.
SEC. 2. Section 14838 of the Government Code is amended to read:
14838. In order to facilitate the participation of small
business, including microbusiness, in the provision of goods,
information technology, and services to the state, and in the
construction, including alteration, demolition, repair, or
improvement, of state facilities, the directors of the department and
other state agencies that enter those contracts, each within their
respective areas of responsibility, shall do all of the following:
(a) Establish goals, consistent with those established by the
Office of Small Business Certification and Resources, for the extent
of 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. Each state agency
that is required to make a report to the Director of General
Services pursuant to subdivision (f) of Section 14838.1 shall include
the goals in its report. The director shall also include the goals
in the department report made pursuant to Section 10111 of the Public
Contract Code.
(b) Provide for small business preference, or nonsmall business
preference for bidders that provide for small business and
microbusiness subcontractor participation, in the award of contracts
for goods, information technology, services, and construction, as
follows:
(1) In solicitations where an award is to be made to the lowest
responsible bidder meeting specifications, the preference to small
business and microbusiness shall be 5 percent of the lowest
responsible bidder meeting specifications. The preference to nonsmall
business bidders that provide for small business or microbusiness
subcontractor participation shall be, up to a maximum of 5 percent of
the lowest responsible bidder meeting specifications, determined
according to rules and regulations established by the Department of
General Services.
(2) In solicitations where an award is to be made to the highest
scored bidder based on evaluation factors in addition to price, the
preference to small business or microbusiness shall be 5 percent of
the highest responsible bidder's total score. The preference to
nonsmall business bidders that provide for small business or
microbusiness subcontractor participation shall be up to a maximum 5
percent of the highest responsible bidder's total score, determined
according to rules and regulations established by the Department of
General Services.
(3) The preferences under paragraphs (1) and (2) shall not be
awarded to a noncompliant bidder and shall not be used to achieve any
applicable minimum requirements.
(4) The preference under paragraph (1) shall not exceed fifty
thousand dollars ($50,000) for any bid, and the combined cost of
preferences granted pursuant to paragraph (1) and any other provision
of law shall not exceed one hundred thousand dollars ($100,000). In
bids in which the state has reserved the right to make multiple
awards, this fifty thousand dollar ($50,000) maximum preference cost
shall be applied, to the extent possible, so as to maximize the
dollar participation of small businesses, including microbusinesses,
in the contract award.
(c) Give special consideration to small businesses and
microbusinesses by both:
(1) Reducing the experience required.
(2) Reducing the level of inventory normally required.
(d) Give special assistance to small businesses and
microbusinesses in the preparation and submission of the information
requested in Section 14310.
(e) Under the authorization granted in Section 10163 of the Public
Contract Code, make awards, whenever feasible, to small business and
microbusiness bidders for each project bid upon within their
prequalification rating. This may be accomplished by dividing major
projects into subprojects so as to allow a small business or
microbusiness contractor to qualify to bid on these subprojects.
(f) Small business and microbusiness bidders qualified in
accordance with this chapter shall have precedence over nonsmall
business bidders in that the application of a bidder preference for
which nonsmall business bidders may be eligible under this section or
any other provision of law shall not result in the denial of the
award to a small business or microbusiness bidder. In the event of a
precise tie between the low responsible bid of a bidder meeting
specifications of a small business or microbusiness, and the low
responsible bid of a bidder meeting the specifications of a disabled
veteran-owned small business or microbusiness, the contract shall be
awarded to the disabled veteran-owned small business or
microbusiness. This provision applies if the small business or
microbusiness bidder is the lowest responsible bidder, as well as if
the small business or microbusiness bidder is eligible for award as
the result of application of the small business and microbusiness
bidder preference granted by subdivision (b).
SEC. 3. Section 10111 of the Public Contract Code is amended to
read:
10111. Commencing January 1, 2007, the department shall make
available a report on contracting activity containing the following
information:
(a) A listing of consulting services contracts that the state has
entered into during the previous fiscal year. The listing shall
include the following:
(1) The name and identification number of each contractor.
(2) The type of bidding entered into, the number of bidders,
whether the low bidder was accepted, and if the low bidder was not
accepted, an explanation of why another contractor was selected.
(3) The amount of the contract price.
(4) Whether the contract was a noncompetitive bid contract, and
why the contract was a noncompetitive bid contract.
(5) Justification for entering into each consulting services
contract.
(6) The purpose of the contract and the potential beneficiaries.
(7) The date when the initial contract was signed, and the date
when the work began and was completed.
(b) The report shall also include a separate listing of consultant
contracts completed during that fiscal year, with the same
information specified in subdivision (a).
(c) The information specified in subdivisions (a) and (b) shall
also include a list of any contracts underway during that fiscal year
on which a change was made regarding the following:
(1) The completion date of the contract.
(2) The amount of money to be received by the contractor, if it
exceeds 3 percent of the original contract price.
(3) The purpose of the contract or duties of the contractor. A
brief explanation shall be given if the change in purpose is
significant.
(d) The level of participation, by agency, of disabled veteran
business enterprises in statewide contracting and shall include
dollar values of contract award for the following categories:
(1) Construction.
(2) Architectural, engineering, and other professional services.
(3) Procurement of materials, supplies, and equipment.
(4) Information technology procurements.
Additionally, the report shall include a statistical summary
detailing each awarding department's goal achievement and a statewide
total of those goals.
(e) The level of participation by small business in state
contracting including:
(1) Upon request, an up-to-date list of eligible small business
bidders by general procurement and construction contract categories,
noting company names and addresses and also noting which small
businesses also qualify as microbusinesses.
(2) (A) By general procurement and construction contract
categories, statistics comparing the small business and microbusiness
contract participation dollars to the total state contract
participation dollars.
(B) To the extent feasible, beginning in 2018,
with the report issued in 2018 covering contracting activity in
the 2017-18 fiscal year, the information required to be
included pursuant to subparagraph (A) also shall be provided by prime
contractor and subcontractor, separately.
(3) (A) By awarding department and general procurement and
construction categories, statistics comparing the small business and
microbusiness contract participation dollars to the total state
contract participation dollars.
(B) To the extent feasible, beginning in 2018,
with the report issued in 2018 covering contracting activity in
the 2017-18 fiscal year, the information required to be
included pursuant to subparagraph (A) also shall be provided by prime
contractor and subcontractor, separately.
(4) Any recommendations for changes in statutes or state policies
to improve opportunities for small businesses and microbusinesses.
(5) A statistical summary of small businesses and microbusinesses
certified for state contracting by the number of employees at the
business for each of the following categories: 0-5, 6-20,
21-50, and 51 0-20, and 21 to 100.
(6) To the extent feasible, beginning in the year 2008,
with the report issued in 2018 covering
contracting activity in the 2017-18 fiscal year, the number of
contracts awarded by the department in the categories specified in
paragraph (5).
(7) The number of contracts and dollar amounts awarded annually
pursuant to Section 14838.5 of the Government Code to small
businesses, microbusinesses, and disabled veteran business
enterprises.
(f) The level of participation of business enterprises, by race,
ethnicity, and gender of the owner, in contracts to the extent that
the information has been voluntarily reported to the department. In
addition, the report shall contain the levels of participation of
business enterprises, by race, ethnicity, and gender of the owner,
and whether the business is a lesbian, gay, bisexual, or transgender
owned business for the following categories of contracts, to the
extent that the information has been voluntarily reported to the
department:
(1) Construction.
(2) Purchases of materials, supplies, or equipment.
(3) Professional services.
(g) For purposes of this section, "subcontractor" and "prime
contractor" shall have the same meaning as those terms are defined in
Section 4113.
(h) The amendments made to this section by Chapter 861 of the
Statutes of 2012 shall apply on and after January 1, 2013.