BILL ANALYSIS
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THIRD READING
Bill No: SB 548
Author: Huff (R)
Amended: 5/18/09
Vote: 21
SENATE VETERANS AFFAIRS COMMITTEE : 7-0, 4/14/09
AYES: Denham, Correa, Wiggins, Negrete McLeod, Cedillo,
Wyland, Maldonado
SENATE APPROPRIATIONS COMMITTEE : 12-0, 5/28/09
AYES: Kehoe, Cox, Corbett, Denham, DeSaulnier, Hancock,
Leno, Oropeza, Runner, Walters, Wyland, Yee
NO VOTE RECORDED: Wolk
SUBJECT : California Disabled Veteran Business Enterprise
Program
SOURCE : Author
DIGEST : This bill requires an awarding department, upon
completion of an awarded contract for which a commitment to
achieve disabled veteran business enterprise goal was made,
to require the prime contractor that entered into a
subcontract with a disabled veteran business enterprise to
certify to the awarding department that all payments under
the contract have been made to the disabled veteran
business enterprise. This bill also requires an awarding
department to keep that certification on file. This bill
specifies that a person or entity that knowingly provides
false information is subject to a civil penalty, as
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specified, and that an action for a civil penalty may be
brought by any public prosecutor in the name of the people
of the State of California.
ANALYSIS : Under existing law, the Department of General
Services (DGS), except in the case of contracts for
professional bond services, is the administering agency of
the California Disabled Veteran Business Enterprise (DVBE)
Program, which requires state agencies and all other state
entities contracting for materials, supplies, equipment,
alteration, repair, or improvement to have at least three
percent participation goals for disabled veteran business
enterprises. Existing law specifies the duties of DGS and
the Department of Veterans Affairs in meeting that
requirement, and sets standards for meeting the program's
participation goals, as provided.
This bill requires the awarding department to keep that
certification on file. DGS indicates one-time costs of
about $40,000 to develop regulations, and to develop bid
language that requires the primary contractor who makes a
commitment to use a DVBE to either (1) certify that all
payments have been made to the DVBE contractor, or (2)
document why there was no subcontract with the DVBE. This
bill also provides that any person or entity that knowingly
provides false information will be subject to a civil
penalty of between $2,500 to a maximum of $25,000.
The DBVE Program was established in 1989 and gives
preference points to qualifying businesses when awarding
state contracts. Prime contractors are required to include
DVBEs in at least three percent of their work in order to
meet participation goals. This bill is intended to ensure
that contractors do not list a DVBE as a subcontractor for
purposes of gaining a preference during the awards phase of
bidding, and then no using that DVBE on the project.
Current law defines a DVBE as a business certified to have
51 percent of its ownership held by one or more disabled
veteran, or in the case of a publicly owned business, at
least 51 percent of the stock is owned by disabled
veterans. DGS is the state entity responsible for
certifying businesses and meeting the definition of DVBE.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Admin expenses $40 $0
$0 General
SUPPORT : (Verified 5/28/09)
American Legion, Department of California
AMVETS, Department of California
Complianice News
Gennis and Associates, Engineers
Katin Engineering Consulting
The California Disabled Veterans Business Alliance
Legion of Valor of the USA (Medal of Honor Legion)
TSM:cm 5/29/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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