BILL ANALYSIS
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THIRD READING
Bill No: AB 569
Author: Emmerson (R) and Solorio (D) et al
Amended: 9/10/09 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SUBJECT : Public contracts: disabled veteran business
enterprise: small
business enterprise
SOURCE : Author
DIGEST : This bill re-establishes the good faith effort
to meet existing disabled veteran business enterprise goals
by a state agency or department on any advertised contract
by July 28, 2009.
ANALYSIS : AB 21xxxx was enacted as part of the budget
package in July and signed into law as an urgency statute
on July 28. AB 21xxxx made changes to the Public Contract
Code modifying the manner in which Disabled Veteran
Business Enterprises (DVBE) are contracted with to perform
public works projects contracted by state agencies.
Public Contract Code (Section 10115 (c)) requires state
departments to meet a three percent goal of having DVBE
firms be contracted with on state contracts. Prior to AB
21xxxx, bidding contractors were required to either meet
the three percent goal in their bid or were required to
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demonstrate a good faith effort to solicit bids from DVBE
firms.
AB 21xxxx eliminated the good faith option for a contractor
which results in the bidding contractor being required to
meet the three percent goal (quota) in their bid or have
their bid rejected as non-responsive.
There are currently only 300 DVBE firms statewide certified
by the Department of General Services who are eligible to
be solicited for bids on state contracts. There is not a
large enough pool of DVBE contractor firms to allow bidding
contractors to meet the 3% goal on all bids. (For example,
a drywall contractor normally would not be used on a
Caltrans highway project.) This will result in fewer
contractors bidding on state work; contractors bids being
considered non-responsive and rejected, and increased
incidents of bid protests over concern of the use of "false
front" DVBE firms being used by contractors in an attempt
to meet the three percent goal.
The construction industry has reached a compromise with
state agencies to modify the statutory changes enacted by
AB 21xxxx to avoid the bidding issues resulting from the
new law.
This bill:
1.Reinstates the option for a contractor to demonstrate
efforts to contract with DVBE firms as an alternative to
strictly meeting the three percent DVBE goal for public
works contracts only.
2.Requires the contractor to solicit DVBE's from the
Certified DVBE data base maintained by the Department of
General Services.
3.Requires contractors to use the following specific
efforts to solicit bids from DVBE's:
A. Document that the bidder provided interested
disabled veteran business enterprises with
information such as: identification of the work
available, the date the disabled veteran business
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enterprises bid was due to the bidder, the specified
bonding and licensing requirements, and the prime
contractor's contact person.
B. Give disabled veteran business enterprises a
seven (7) calendar day response time to respond to a
solicitation
C. Utilize various contact methods including but
not limited to: published advertising, telephone,
email, fax, or regular mail.
D. Provide all bids received from disabled veteran
business enterprises.
4.Requires contractors to state reasons and provide
documentation for not using a bid from a DVBE firm.
5.Sunsets these provisions in 2013.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 9/11/09)
Associated General Contractors of California
California Association of Sheet Metal and Air Conditioning
Contractors National Association
California Chapter of the American Fence Contractors'
Association
California Chapters of the National Electrical Contractors
Association
California Fence Contractors' Association
California Legislative Conference of the Plumbing, Heating
and Piping
Industry
California Nevada Conference of Operating Engineers
Construction Employers Association
Engineering and Utility Contractors Association
Engineering Contractors Association
Flasher Barricade Association
Golden State Builders Exchanges
Marin Builders' Association
Southern California Contractors Association
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AGB:nl 9/11/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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