Amended in Assembly March 18, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1568

Introduced by Assembly Member Grove

January 30, 2014

An act to amend begin delete Sections 14838.5 and 14838.64 end delete begin insert Section 14838.5 end insert of the Government Code, begin delete and to amend Sections 10508.5 and 20651.2 of the Public Contract Code, end delete relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

AB 1568, as amended, Grove. Public contracts: direct quotes.

Existing law authorizes a state begin delete agency, the University of California, the California State University, and a community college district end delete begin insert agency, notwithstanding certain advertising, bidding, and protest provisions, end insert to award a contract for goods, services, or information technology with a value between $5,000 and $250,000 begin delete or $100,000 and $250,000, as applicable, end delete to a certified small business, including a microbusiness begin delete and end delete begin insert , or to end insert a disabled veteran business enterprise, if that agency obtains price quotations from 2 or more certified small businesses begin insert or disabled veteran business enterprises end insert , as specified.

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This bill would require these agencies to directly obtain the price quotations from 2 or more certified small businesses, as specified.

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This bill would, as provided, require a state agency to contact at least one additional certified small business or disabled veteran business enterprise, if that agency does not otherwise obtain more than the 2 required price quotations.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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The Legislature finds and declares the following:

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(a) On February 18, 2014, the California State Auditor released
a report finding that in the 2012-13 fiscal year, 83 percent of
contract award amounts awarded to disabled veteran business
enterprises (DVBEs) went to only 30 DVBE firms. This represents
just 2 percent of the state’s DVBEs.

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(b) According to the California State Auditor, one DVBE firm
entered into 922 contracts with six different awarding departments,
while 81 percent of DVBEs did not receive a single contract.

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(c) In this report, the California State Auditor makes the
following recommendation to the Legislature: “For the DVBE
program to benefit a broad base of disabled veteran-owned
businesses financially, the Legislature should enact legislation
aimed at increasing the number of DVBEs that contract with the
State.” It is the intent of the Legislature to help implement this
recommendation by encouraging agencies exercising the small
business option to “cold call” small businesses and DVBEs that
have not previously contracted with that agency.

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(d) Expanding the number of bids solicited from small businesses
and DVBEs will increase competition and provide greater
opportunities for participation in the program.

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begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 14838.5 of the Government Code is amended
to read:

14838.5.  

(a)  begin insert (1) end insert begin insert   end insert Notwithstanding the advertising, bidding,
and protest provisions of Chapter 6 (commencing with Section
14825) of this part and Chapter 2 (commencing with Section
10290) and Chapter 3 (commencing with Section 12100) of Part
2 of Division 2 of the Public Contract Code, a state agency may
award a contract for the acquisition of goods, services, or
information technology that has an estimated value of greater than
five thousand dollars ($5,000), but less than two hundred fifty
thousand dollars ($250,000), to a certified small business, including
a microbusiness, or to a disabled veteran business enterprise, as
long as the agency obtains price quotations begin delete directly end delete from two or
more certified small businesses, including microbusinesses, or
begin delete directly end delete from two or more disabled begin delete veterans end delete begin insert veteran end insert business
enterprises.

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(2) If the agency does not otherwise obtain more than two price
quotations from either certified small businesses, including
microbusinesses, or disabled veteran business enterprises, the
agency shall contact at least one additional certified small
business, including a microbusiness, or at least one additional
disabled veteran business enterprise, and provide a reasonable
opportunity for the additionally contacted business or businesses
to submit a price quotation. If the additionally contacted business
or businesses decline to submit a price quotation, the agency may
proceed with the two quotations it has obtained.

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(A) The agency may contact a business of a type described in
this paragraph at any time and nothing in this paragraph shall be
construed to delay the award of a contract by requiring that the
agency first obtain the two price quotations required in paragraph
(1) before initiating an additional contact with a business of a type
described in this paragraph.

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(B) It is the intent of this subdivision to encourage an agency
to award a contract to a business that has not previously contracted
with the agency within the prior 12 months.

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(b) In carrying out subdivision (a), a state agency shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, or from a disabled
veteran business enterprise.

(c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the acquisition of goods, services, or
information technology, or a greater amount as administratively
established by the director, a state agency shall obtain at least two
price quotations begin delete directly end delete from responsible suppliers whenever there
is reason to believe a response from a single source is not a fair
and reasonable price.

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SEC. 2.  

Section 14838.64 of the Government Code is amended
to read:

14838.64.  

(a) Notwithstanding any other law, including, but
not limited to, the advertising, bidding, and protest provisions of
Chapter 6 (commencing with Section 14825) of this part and
Chapter 2.5 (commencing with Section 10700) and Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, the California State University may award
a contract for the acquisition of goods, services, or information
technology that has an estimated value of greater than five thousand
dollars ($5,000), but less than two hundred fifty thousand dollars
($250,000), to a certified small business, including a microbusiness,
or to a disabled veteran business enterprise, if the California State
University directly obtains price quotations from two or more
certified small businesses, including microbusinesses, or directly
from two or more disabled veteran business enterprises.

(b) In carrying out subdivision (a), the California State
University shall consider a responsive offer timely received from
a responsible certified small business, including a microbusiness,
or from a disabled veteran business enterprise.

SEC. 3.  

Section 10508.5 of the Public Contract Code is
amended to read:

10508.5.  

(a) Notwithstanding any other law, including, but
not limited to, the advertising, bidding, and protest provisions of
Chapter 2.1 (commencing with Section 10500), the University of
California may award a contract for the acquisition of goods,
services, or information technology that has an estimated value of
greater than one hundred thousand dollars ($100,000), but less
than two hundred fifty thousand dollars ($250,000), to a certified
small business, including a microbusiness, or to a disabled veteran
business enterprise, if the University of California directly obtains
price quotations from two or more certified small businesses,
including microbusinesses, or directly from two or more disabled
veteran business enterprises.

(b) In carrying out subdivision (a), the University of California
shall consider a responsive offer timely received from a responsible
certified small business, including a microbusiness, or from a
disabled veteran business enterprise.

(c) No provision of this section shall apply to the University of
California except to the extent that the Regents of the University
of California, by appropriate resolution, make that provision
applicable.

SEC. 4.  

Section 20651.2 of the Public Contract Code is
amended to read:

20651.2.  

(a) Notwithstanding any other law, including, but
not limited to, the advertising, bidding, and protest provisions of
this article and Division 7 (commencing with Section 70900) of
Title 3 of the Education Code, but subject to Section 88003.1, the
governing board of a community college district may award a
contract for the acquisition of goods, services, or information
technology that has an estimated value of greater than five thousand
dollars ($5,000), but less than two hundred fifty thousand dollars
($250,000), to a certified small business, including a microbusiness,
or to a disabled veteran business enterprise, if the community
college district directly obtains price quotations from two or more
certified small businesses, including microbusinesses, or directly
from two or more disabled veteran business enterprises.

(b) In carrying out subdivision (a), a community college district
shall consider a responsive offer timely received from a responsible
certified small business, including a microbusiness, or from a
disabled veteran business enterprise.

(c) The definitions set forth in Section 14837 of the Government
Code apply to this section.

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