BILL ANALYSIS
SB 548
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 548 (Huff ) - As Amended: July 15, 2009
Policy Committee: Jobs, Economic
Development & the Economy Vote: 7 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the department awarding a state contract,
which was approved based on the contractor's commitment to use a
Disabled Veteran-Owned Business Enterprise (DVBE) in the
performance of the contract, to require certification at the
completion of the contract that all related payments have been
made to the DVBE. Specifically, this bill:
1)Requires prime contractors who have stipulated they would use
a DVBE as a subcontractor, to certify at the conclusion of the
contract that all previously represented payments to the DVBE
have been made.
2)Requires the awarding department to retain the certification
on file.
3)Specifies that any person or entity that knowingly provides
false information pursuant to this bill is subject to a civil
penalty for each violation in the minimum amount of $2,500 and
the maximum amount of $25,000. Actions may be brought by any
public prosecutor in the name of the people of the State of
California and the penalty imposed shall be enforceable as a
civil judgment.
FISCAL EFFECT
Because departments are currently required to obtain and retain
specified information for contracts, the requirements in this
bill related to the certifications would not result in any
increased costs to the state.
SB 548
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COMMENTS
1)Purpose . DVBE subcontractors are written into state contracts
by prime contractors who commit to using the DVBE for 3% or
more of the work on a project. According to the author,
contractors often exploit the veterans this program was
intended to help by not awarding the agreed-upon jobs,
operations and payments to the DVBE once the contract is in
place. The author believes that there is currently no
practical enforcement mechanism that ensures the DVBE
subcontractor receives 3% of the work.
The author has introduced SB 548 as a means to protect DVBE
contractors from fraud by requiring the prime contractor to
certify that all payments originally offered to a veteran for
work have been fulfilled. The author states that this
certification will allow awarding departments to more easily
demonstrate that a DVBE was intentionally exploited and ensure
disabled veterans enterprises receive the agreed-upon work and
pay.
2)Background . The DVBE Program was established in 1989 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. Under the provisions of the program, each
state agency is encouraged, in awarding contracts, to honor
California's disabled veterans by taking all practical actions
necessary to meet or exceed a 3% DVBE participation goal.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081