BILL NUMBER: AB 926	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Ruskin
   (Principal coauthor: Assembly Member Hill)
   (Coauthor: Assembly Member Price)

                        FEBRUARY 26, 2009

   An act to amend Section 14837 of the Government Code, to amend
Section 999 of the Military and Veterans Code, and to amend Sections
10302, 10344, and 12104.5 of the Public Contract Code, relating to
public contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 926, as introduced, Ruskin. State contracts: goods: loss
leader.
   (1) Existing law governs contracting between state agencies and
private contractors, and sets forth requirements for the procurement
of materials, supplies, equipment, and services, and the acquisition
of information technology goods and services by state agencies. Under
existing law, it is unlawful for any person engaged in business with
this state to sell or use any article or product as a "loss leader,"
as defined.
   This bill would require a statement of this latter provision to be
specified in a solicitation for a state contract for goods, a
request for proposal for a contract for services that involves the
furnishing of equipment, materials, or supplies and a request for
proposal for a state contract for the acquisition of information
technology goods and services.
   (2) Existing law encourages state agencies that enter into
contracts to establish goals to facilitate the participation of small
businesses and disabled veteran business enterprises.
   This bill would make technical, nonsubstantive changes to those
provisions.
   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.  Section 14837 of the Government Code is amended to
read:
   14837.  As used in this chapter:
   (a) "Department" means the Department of General Services.
   (b) "Director" means the Director of General Services.
   (c) "Manufacturer" means a business that meets both of the
following requirements:
   (1) It is primarily engaged in the chemical or mechanical
transformation of raw materials or processed substances into new
products.
   (2) It is classified between Codes 31 to 33, inclusive, of the
North American Industry Classification System.
   (d) (1) "Small business" means an independently owned and operated
business that is not dominant in its field of operation, the
principal office of which is located in California, the officers of
which are domiciled in California, and  that  
which  , together with affiliates, has 100 or fewer employees,
and average annual gross receipts of ten million dollars
($10,000,000) or less over the previous three years, or is a
manufacturer, as defined in subdivision (c), with 100 or fewer
employees.
   (2) "Microbusiness" is a small business  that 
 which  , together with affiliates, has average annual gross
receipts of two million five hundred thousand dollars ($2,500,000)
or less over the previous three years, or is a manufacturer, as
defined in subdivision (c), with 25 or fewer employees.
   (3) The director shall conduct a biennial review of the average
annual gross receipt levels specified in this subdivision and may
adjust that level to reflect changes in the California Consumer Price
Index for all items. To reflect unique variations or characteristics
of different industries, the director may establish, to the extent
necessary, either higher or lower qualifying standards than those
specified in this subdivision, or alternative standards based on
other applicable criteria.
   (4) Standards applied under this subdivision shall be established
by regulation, in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2, and shall preclude
the qualification of businesses that are dominant in their industry.
In addition, the standards shall provide that the certified small
business or microbusiness shall provide goods or services that
contribute to the fulfillment of the contract requirements by
performing a commercially useful function, as defined below:
   (A) A certified small business or microbusiness is deemed to
perform a commercially useful function if the business does all of
the following:
   (i) (I) Is responsible for the execution of a distinct element of
the work of the contract.
   (II) Carries out its obligation by actually performing, managing,
or supervising the work involved.
   (III) Performs work that is normal for its business services and
functions.
   (ii) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.
   (B) A contractor, subcontractor, or supplier will not be
considered to perform a commercially useful function if the
contractor's, subcontractor's, or supplier's role is limited to that
of an extra participant in a transaction, contract, or project
through which funds are passed in order to obtain the appearance of
small business or microbusiness participation.
   (e) "Disabled veteran business enterprise" means an enterprise
that has been certified as meeting the qualifications established by
subdivision (g) of Section 999 of the Military and Veterans Code.
  SEC. 2.  Section 999 of the Military and Veterans Code is amended
to read:
   999.  (a) This article shall be known as, and may be cited as, the
California Disabled Veteran Business Enterprise Program. The
California Disabled Veteran Business Enterprise Program is
established to address the special needs of disabled veterans seeking
rehabilitation and training through entrepreneurship and to
recognize the sacrifices of Californians disabled during military
service. It is the intent of the Legislature that every state
procurement authority honor California's disabled veterans by taking
all practical actions necessary to meet or exceed the disabled
veteran business enterprise participation goal of a minimum of 3
percent of total contract value.
   (b) As used in this article, the following definitions apply:
   (1) "Administering agency" means the Treasurer in the case of
contracts for professional bond services, and the Department of
General Services' Office of Small Business and Disabled Veteran
Business Enterprise Services, in the case of contracts governed by
Section 999.2.
   (2) "Awarding department" means  any   a
 state agency, department, governmental entity, or other officer
or entity empowered by law to issue bonds or enter into contracts on
behalf of the  State of California   state
 .
   (3) "Bonds" means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by, or on
behalf of, the  State of California  state 
.
   (4) "Contract" includes any agreement or joint agreement to
provide professional bond services to the State of California or an
awarding department. "Contract" also includes any agreement or joint
development agreement to provide labor, services, materials,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for, and on behalf of,
the  State of California   state  .
   (5) (A) "Contractor" means any person or persons, regardless of
race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof  who   that  submits a
bid and enters into a contract with a representative of a state
agency, department, governmental entity, or other officer empowered
by law to enter into contracts on behalf of the  State of
California   state  . "Contractor" includes any
provider of professional bond services who enters into a contract
with an awarding department.
   (B) "Disabled veteran business enterprise contractor,
subcontractor, or supplier" means any person or entity that has been
certified by the administering agency pursuant to this article and
that performs a "commercially useful function," as defined below, in
providing services or goods that contribute to the fulfillment of the
contract requirements:
   (i) A person or an entity is deemed to perform a "commercially
useful function" if a person or entity does all of the following:
   (I) (aa) Is responsible for the execution of a distinct element of
the work of the contract.
   (ab) Carries out the obligation by actually performing, managing,
or supervising the work involved.
   (ac) Performs work that is normal for its business services and
functions.
   (II) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.
   (ii) A contractor, subcontractor, or supplier will not be
considered to perform a "commercially useful function" if the
contractor's, subcontractor's, or supplier's role is limited to that
of an extra participant in a transaction, contract, or project
through which funds are passed in order to obtain the appearance of a
disabled veteran business enterprise participation.
   (6) "Disabled veteran" means a veteran of the military, naval, or
air service of the United States, including, but not limited to, the
Philippine Commonwealth Army, the Regular Scouts, "Old Scouts," and
the Special Philippine Scouts, "New Scouts," who has at least a
10-percent service-connected disability and who is domiciled in the
 State of California   state  .
   (7) (A) "Disabled veteran business enterprise" means a business
certified by the administering agency as meeting all of the following
requirements:
   (i) It is a sole proprietorship at least 51 percent owned by one
or more disabled veterans or, in the case of a publicly owned
business, at least 51 percent of its stock is owned by one or more
disabled veterans; a subsidiary that is wholly owned by a parent
corporation, but only if at least 51 percent of the voting stock of
the parent corporation is owned by one or more disabled veterans; or
a joint venture in which at least 51 percent of the joint venture's
management, control, and earnings are held by one or more disabled
veterans.
   (ii) The management and control of the daily business operations
are by one or more disabled veterans. The disabled veterans who
exercise management and control are not required to be the same
disabled veterans as the owners of the business.
   (iii) It is a sole proprietorship, corporation, or partnership
with its home office located in the United States, which is not a
branch or subsidiary of a foreign corporation, foreign firm, or other
foreign-based business.
   (B) Notwithstanding subparagraph (A), after the death or the
certification of a permanent medical disability of a disabled veteran
who is a majority owner of a business that qualified as a disabled
veteran business enterprise prior to that death or certification of a
permanent medical disability, and solely for purposes of any
contract entered into before that death or certification, that
business shall be deemed to be a disabled veteran business enterprise
for a period not to exceed three years after the date of that death
or certification of a permanent medical disability, if the business
is inherited or controlled by the spouse or child of that majority
owner, or by both of those persons.
   (8) "Foreign corporation," "foreign firm," or "foreign-based
business" means a business entity that is incorporated or has its
principal headquarters located outside the United States of America.
   (9) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to achieve.
   (10) "Management and control" means effective and demonstrable
management of the business entity.
   (11) "Professional bond services" include services as financial
advisers, bond counsel, underwriters in negotiated transactions,
underwriter's counsel, financial printers, feasibility consultants,
and other professional services related to the issuance and sale of
bonds.
  SEC. 3.  Section 10302 of the Public Contract Code is amended to
read:
   10302.   (a)    Except in cases of emergency
where immediate purchase of goods without bid is necessary for the
protection of the public health, welfare, or safety, whenever the
department contracts for goods in excess of twenty-five thousand
dollars ($25,000), or a higher amount as established by the director,
the department shall advertise in the California State Contracts
Register the availability of its solicitation, and interested
suppliers, upon request, shall be furnished with copies of the
solicitation. In addition to advertising in the California State
Contracts Register, the department shall post in a public place a
copy of the solicitation, which shall remain posted until seven days
after an award has been made. Whenever a contract in excess of
twenty-five thousand dollars ($25,000), or a higher amount as
established by the director, is made  under  
pursuant to  this section or Section 10301 without the taking of
bids, the department shall prepare a written document stating the
fact of the contract together with the facts requiring the contract
of the goods without the taking of bids. This document shall be
maintained by the department and shall be available as a public
record. 
   (b) Every solicitation shall contain the following statement:
 
   "It is unlawful for any person engaged in business within this
state to sell or use any article or product as a "loss leader" as
defined in Section 17030 of the Business and Professions Code." 

  SEC. 4.  Section 10344 of the Public Contract Code is amended to
read:
   10344.  (a) Contracts subject to the provisions of this article
may be awarded under a procedure  which   that
 makes use of a request for proposal. State agencies that use
this procedure shall include in the request for proposal a clear,
precise description of the work to be performed or services to be
provided, a description of the format that proposals shall follow and
the elements they shall contain, the standards the agency will use
in evaluating proposals, the date on which proposals are due and the
timetable the agency will follow in reviewing and evaluating them.
   State agencies  which   that  use a
procedure that makes use of a request for proposal shall evaluate
proposals and award contracts in accordance with the provisions of
subdivision (b) or (c). No proposals shall be considered that have
not been received at the place, and prior to the closing time, stated
in the request for proposal.
   (b) State agencies that use the evaluation and selection procedure
in this subdivision shall include in the request for proposal, in
addition to the information required by subdivision (a), a
requirement that bidders submit their proposals with the bid price
and all cost information in a separate, sealed envelope.
   Proposals shall be evaluated and the contract awarded in the
following manner:
   (1) All proposals received shall be reviewed to determine those
that meet the format requirements and the standards specified in the
request for proposal.
   (2) The sealed envelopes containing the bid price and cost
information for those proposals that meet the format requirements and
standards shall then be publicly opened and read.
   (3) The contract shall be awarded to the lowest responsible bidder
meeting the standards.
   (c) State agencies that use the evaluation and selection procedure
in this subdivision shall include in the request for proposal, in
addition to the information required by subdivision (a), a
description of the methods that will be used in evaluating and
scoring the proposals. Any evaluation and scoring method shall ensure
that substantial weight in relationship to all other criteria
utilized shall be given to the contract price proposed by the bidder.

   Proposals shall be evaluated and the contract awarded in the
following manner:
   (1) All proposals shall be reviewed to determine which meet the
format requirements specified in the request for proposal.
   (2) All proposals meeting the formal requirements shall then be
submitted to an agency evaluation committee which shall evaluate and
score the proposals using the methods specified in the request for
proposal. All proposals and all evaluation and scoring sheets shall
be available for public inspection at the conclusion of the committee
scoring process.
   (3) The contract shall be awarded to the bidder whose proposal is
given the highest score by the evaluation committee.
   (d) Nothing in this section shall require the awarding of the
contract if no proposals are received containing bids offering a
contract price that in the opinion of the state agency is a
reasonable price. 
   (e) In addition to the information required by subdivision (a), a
request for proposal for a contract that involves the furnishing of
equipment, materials, or supplies shall contain the following
statement:  
   "It is unlawful for any person engaged in business within this
state to sell or use any article or product as a "loss leader" as
defined in Section 17030 of the Business and Professions Code." 

  SEC. 5.  Section 12104.5 of the Public Contract Code is amended to
read:
   12104.5.  (a) All rules and requirements governing an information
technology acquisition, for which the department determines that a
request for proposal (RFP) is appropriate, shall be communicated in
writing to all vendors that have expressed an intent to bid and shall
be posted in a public location. Any changes to the rules and
requirements governing that RFP shall be communicated in writing to
all vendors that have expressed an intent to bid and shall be posted
in a public location. No requirements other than those provided by
law or outside of the published RFP and posted addendums shall be
used by the department to score bids. 
   (b) All requests for proposals shall contain the following
statement:  
   "It is unlawful for any person engaged in business within this
state to sell or use any article or product as a "loss leader" as
defined in Section 17030 of the Business and Professions Code." 

   (b) 
    (c)  The requirements of this section shall be in
addition to any other requirement provided by law.