BILL ANALYSIS �
AB 1783
Page 1
Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1783 (Perea) - As Amended: April 10, 2012
Policy Committee: JEDE Vote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Department of General Services (DGS) to
publish on the department's website, and make available to local
agencies for their use, a list of small businesses and
microbusinesses that have been certified as such by DGS.
Specifically, this bill:
1)Allows local agencies to have access to the DGS list of
certified small business for use as a reference for local
programs.
2)Eliminates the ability of the small business to be certified
by local governments and have that made available for use by
the State of California.
3)Allows local governments to set additional criteria for local
preference purposes.
FISCAL EFFECT
Minor and absorbable costs for DGS.
COMMENTS
1)Purpose. According to the author, AB 1783 will save time and
money for state and local government agencies as well as the
small business community. The author argues allowing a small
business to become certified to contract with any agency in
California by filling out just one form would provide a more
business friendly process and help increase the number of
California Certified Small Businesses. The author notes,
currently businesses may need to obtain specific and
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repetitive certifications to bid on government contracts and
the process can be time consuming, burdensome, disruptive and
costly. The author argues the state already has a process to
determine if a small business meets the requirement to be a
certified small business and the bill would alleviate staff
workload at local agencies by not requiring a small business
to go through a repetitive certification process.
2)Small Business Certification : DGS is responsible for the
certification of small businesses for purposes of the state's
small business preference. To become certified, DGS requires
small businesses and microbusinesses to submit a single
application, and supporting documentation.
At the local level, individual jurisdictions manage the
certification of small businesses and microbusinesses for
purposes of local preferences. While some jurisdictions have
signed memorandums of understanding with DGS agreeing to
consider a small business certified for purposes of local
preferences, any small business or microbusiness that has been
certified at the state level, only a few jurisdictions
participate. As a result, many jurisdictions require small
and microbusinesses to repeat the certification process at the
local level in a process that is often duplicative of state
certification.
3)State procurement and small businesses. The state has had a
small business preference within the state's procurement
process for over 30 years. In 1989, a disabled veteran owned
business enterprise (DVBE) component was added. Since 2001,
there have been four Executive Orders specifying a 25% goal
for small business and 3% DVBE participation in state
procurement contracts.
The state's success in achieving small business and DVBE
participation goals in state procurement contracts has been
inconsistent. For only the third time since the small
business participation target was established in 2001, DGS has
reported the state achieved its small business target by
awarding 27% of the value of all contracts to small businesses
in 2008-09. The state did not achieve its 3% DVBE
participation goal in 2008-09.
4)Local preference programs . Some cities have established
programs that grant preference to local or regional small
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businesses. These may be in lieu of or in addition to
preferences for small businesses in general. These current
programs are governed by a combination of state law and city
charter provisions. This bill would seem to grant new
flexibility to these programs by allowing them to, "Set
additional guidelines for local preference purposes."
5)Related legislation : Below is a list of bills related to this
measure from the current and prior sessions.
a) AB 150 (Perea) of 2011, directed DGS to ensure all state
entities to achieve an annual goal of at least 25% small
business participation in state procurement contracts.
This bill was held on the Suspense File of the Assembly
Appropriations Committee.
b) SB 67 (Price) of 2011, authorized the Department of
General Services to direct all state entities to establish
an annual goal of achieving not less than 25% small
business participation in state procurement contracts, as
specified. This bill was held on the Suspense File of the
Assembly Appropriations Committee.
c) AB 309 (Price) of 2010, among its provisions, required
the establishment of a 25% small business participation
goal for all state entities. This bill was held on the
Suspense File of the Assembly Appropriations Committee.
6)There is no registered opposition to this bill .
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081