BILL ANALYSIS
AB 31
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 31 (Price)
As Amended July 16, 2009
Majority vote
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|ASSEMBLY: |79-0 |(June 1, 2009) |SENATE: |36-0 |(August 24, |
| | | | | |2009) |
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Original Committee Reference: J., E.D. & E.
SUMMARY : Increases the maximum contract threshold amount for
awards to small business, including microbusiness, and disabled
veteran-owned business enterprise (DVBE) under the state's
streamlined procurement process, from $100,000 to $250,000, as
specified. Requires contractors that made contract commitments
to include small business or DVBE participation to report at the
conclusion of the contract on the actual percent of the contract
amount that was allocated to those entities.
The Senate amendments make minor technical changes to the bill.
EXISTING LAW :
1)Designates the Department of General Services (DGS) to
administer the state Small Business Procurement and Contract
Act (Small Business Act), including a streamlined procurement
process for contracts between $5,000 and $100,000, which is
exempt from advertising, bidding, and protest provisions in
the State Contract Act for the acquisition of goods, services,
or information technology.
2)Defines a small business as independently owned, not dominant
in its field of operation, domiciled in California, employing
100 or fewer employees, and earning $10 million or less in
average annual gross revenues for the three previous years. A
microenterprise is defined as a small business that has
average annual gross receipts of $250,000 or less during the
previous three years or is a manufacturer with 25 or fewer
employees. A DVBE is defined as a business entity that is at
least 51% owned or controlled by one or more disabled
veterans, as specified.
3)Establishes the State Contract Act for the purpose of
AB 31
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governing contract practices between state agencies and
private contractors, covering, among other items, contracts
for projects with a value of over $100,000, adjusted
biennially for changes in the California Construction Index,
as specified.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to the Senate Committee on
Appropriations, implementation of this bill could result in
potentially significant increase in contract costs; which are
not likely to be offset by administrative savings associated
with the streamlined process.
COMMENTS : Laws that relate to state small business and DVBE
contracting appear in several state codes including the Public
Contract, Government, and Military and Veterans Codes. This
broad distribution of statute related to contracting has
sometimes led to conflicting and potentially inefficient
contracting activities.
The Legislature is currently considering two measures, SB 548
(Huff) and AB 31, relating to greater transparency and
accountability of payments to subprime DVBEs. Both bills
require contractors that made contract commitments to include
DVBE participation in the performance of the contact to provide
some level of verification at the conclusion of the contract on
the degree to which the DVBE participated.
AB 31 amends the Public Contract Code to require that the prime
contractor "report" on the actual percent of the contract amount
that was paid to the DVBE(s). SB 548, as initially heard by the
Assembly Jobs Committee, amends the Military and Veterans Code
to require the prime contractor to "certify" that they had made
all represented payments to the DVBE. Further, SB 548 included
a penalty for noncompliance, while AB 31 does not.
When SB 548 was heard in Assembly Jobs Committee, the author was
asked to take amendments that would harmonize the provisions of
the different bills in order to ensure that California
veteran-owned businesses received every consideration they were
due and not be "accidentally" over looked because some
procedures were required in one code and not in another.
Although requested, AB 31 does not include the harmonizing
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provisions.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0002436