BILL ANALYSIS �
AB 2630
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ASSEMBLY THIRD READING
AB 2630 (Hueso)
As Amended April 10, 2012
Majority vote
ECONOMIC DEVELOPMENT 4-2 BUSINESS & PROFESSIONS 7-2
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|Ayes:|V. Manuel P�rez, Beall, |Ayes:|Hayashi, Allen, Butler, |
| |Block, Hueso | |Eng, Hagman, Hill, Ma |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Grove, Morrell |Nays:|Bill Berryhill, Smyth |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Gatto, Hall, Hill, Lara, | | |
| |Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
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SUMMARY : Requires the Department of General Services (DGS), in
preparing its report on state contracting activity, to include a
list of activities each state agency used to inform small
businesses of each of the existing preferences available under
state law, and provide the number of preferences used in bidding
packages for the year.
EXISTING LAW :
1)Designates DGS as the administrator of the state Small
Business Procurement and Contract Act (Small Business Act),
including, but not limited to, a small business certification
process, a procurement process for state contracts of up to
$250,000, and a preference for bids made by certified small
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business and microbusinesses.
2)Establishes a 25% annual procurement participation goal,
through Executive Order, for specific state entities, to
contract with small business.
3)Establishes a 25% small business participation goal for
contracts financed with the proceeds of the
infrastructure-related bond acts of 2006.
4)Establishes a 5% preference for bids made by certified small
business and microbusinesses for the award of state
procurement contracts. A single bid preference is limited to
$50,000. Non-small businesses must subcontract at least 25%
of their contracts with small business to qualify for the
small business bidders' preference.
5)Defines a small business as independently owned, not dominant
in its field of operation, domiciled in California, employing
100 or fewer employees, and earning $14 million or less in
average annual gross revenues for the three previous years.
6)Requires DGS to prepare an annual report on state contracting
including the number of contacts and the total value of
contracts in which small business participate. This
information is provided on a per agency basis.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, implementation of this bill will have General Fund
and special fund costs of approximately $100,000 annually.
COMMENTS : According to the author, the Legislature has created
incentives to promote and encourage small business in this state
through the creation of various programs, including preferences
on bidding for state contracts. The author has concerns that
the benefits of these current programs are limited to businesses
that are aware of them and have sufficient knowledge about how
to navigate the requirements of the different programs. The
author concludes it is in the state's best interest to inform
businesses of the many tools already provided to them that are
intended to promote employment and growth.
Small Businesses and the Small Business Act (SBA)
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California's dominance in many economic areas is based, in part,
on the significant role small businesses play in the state's
$1.9 trillion economy. Businesses with 1-99 employees comprise
nearly 98% of all businesses, and they are responsible for
employing more than 37% of all workers in the state.
The SBA was implemented more than 30 years ago to establish a
small business preference within the state's procurement
process. The goal of these preferences is to increase the
number of contracts between the state and small businesses. In
1989, a disabled veteran owned business enterprise (DVBE)
component was added to state procurement practices.
In order to assist state entities in reaching these small
business and DVBE participation goals, contracting entities are
provided a number of specific tools, including a streamlined
procurement method, bid preferences, and lead small business
procurement contracts at every agency.
For only the third time since the small business participation
target was established in 2001, DGS has reported the state
achieved its 25% small business target by awarding 26.88% ($2.4
billion), of the value of all contracts to small businesses in
2008-09. This represents a $2.0 billion increase in contracts
from 2007-08. The state did not achieve its 3% DVBE
participation goal in 2008-09. DVBE contract awards, however,
did increase to 2.96% ($190 million) in 2008-09, up from 2.39%
in 2007-08. California awarded $182 million in small business
and DVBE contracts in 2008-09.
Current law requires DGS to prepare an annual report on state
contracting. The requirements include specific information
about the participation levels of small businesses in state
contracts.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0003447
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