BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1783|
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CONSENT
Bill No: AB 1783
Author: Perea (D)
Amended: 4/10/12 in Assembly
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMM. : 13-0, 6/12/12
AYES: Wright, Anderson, Berryhill, Calderon, Cannella,
Corbett, De Le�n, Evans, Hernandez, Padilla, Walters,
Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 72-0, 5/3/12 - See last page for vote
SUBJECT : Public contracts: small business preferences
SOURCE : Author
DIGEST : This bill requires the Department of General
Services (DGS) to publish on the DGSs Web site, and makes
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, and (3) allows local
governments to set additional criteria for local preference
purposes.
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ANALYSIS : Existing law requires state agencies to give
small businesses a five percent preference in contracts for
construction, the procurement of goods, or the delivery of
services, establishes a procedure by which a business can
be certified as a small business by the DGS for the
purposes of these preferences, and specifies that a
business that has been certified by, or on behalf of,
another governmental entity may be eligible for
certification as a small business if the certifying entity
uses substantially the same or more stringent definitions
as those set forth in existing law, as provided.
Comments
According to the author's office, bill saves time and money
for state and local government agencies as well as the
small business community. The author's office argues
allowing a small business to become certified to contract
with any agency in California by filling out just one form
will provide a more business friendly process and help
increase the number of California Certified Small
Businesses. The author's office notes, currently
businesses may need to obtain specific and repetitive
certifications to bid on government contracts and the
process can be time consuming, burdensome, disruptive and
costly. The author's office argues the state already has a
process to determine if a small business meets the
requirement to be a certified small business and this bill
alleviates staff workload at local agencies by not
requiring a small business to go through a repetitive
certification process.
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
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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.
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
percent goal for small business and three percent 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 percent of the value of all contracts to
small businesses in 2008-09. The state did not achieve its
three percent DVBE participation goal in 2008-09.
Local preference programs . Some cities have established
programs that grant preference to local or regional small
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 seems to grant new
flexibility to these programs by allowing them to, "Set
additional guidelines for local preference purposes."
Related Legislation
AB 150 (Perea, 2011) directed DGS to ensure all state
entities to achieve an annual goal of at least 25 percent
small business participation in state procurement
contracts. The bill was held on the Suspense File of the
Assembly Appropriations Committee.
SB 67 (Price, 2011) authorized DGS to direct all state
entities to establish an annual goal of achieving not less
than 25 percent small business participation in state
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procurement contracts, as specified. The bill was held on
the Suspense File of the Assembly Appropriations Committee.
AB 309 (Price, 2010), among its provisions, required the
establishment of a 25 percent small business participation
goal for all state entities. The bill was held on the
Suspense File of the Assembly Appropriations Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/26/12)
CALASIAN Chamber of Commerce
California Chapter of American Fence Association
California Fence Contractors' Association
California Small Business Association
Central Valley Business Incubator
Cities of Firebaugh, Reedley, San Joaquin, and Selma
Coalition of Small and Disabled Veteran Businesses
Economic Development Corporation serving Fresno County
El Dorado Irrigation District
Engineering Contractors' Association
Flasher Barricade Association
Fresno Chamber of Commerce
Marin Builders Association
Small Business California
ASSEMBLY FLOOR : 72-0, 5/3/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Harkey, Hayashi, Hill, Huber, Hueso, Huffman,
Jeffries, Knight, Lara, Logue, Bonnie Lowenthal, Ma,
Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
P�rez, Portantino, Silva, Skinner, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Yamada, John A.
P�rez
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NO VOTE RECORDED: Bonilla, Fletcher, Furutani, Hall, Roger
Hern�ndez, Jones, Smyth, Williams
DLW:d 6/26/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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