Amended in Assembly May 23, 2014

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 Section 14838.5 of the Government Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

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

Existing law authorizes a state agency, notwithstanding certain advertising, bidding, and protest provisions, to award a contract for goods, services, or information technology with a value between $5,000 and $250,000 to a certified small business, including a microbusiness, or to a disabled veteran business enterprise, if that agency obtains price quotations from 2 or more certified small businesses or disabled veteran business enterprises, as specified.

This bill begin delete would, as provided, end delete begin insert would instead end insert require a state agency to begin delete contact at least one additional end delete begin insert solicit at least 3 price quotations from, and obtain at least 2 price quotations from, 2 or more end insert certified small business or disabled veteran business enterprise, begin delete if that agency does not otherwise obtain more than the 2 required price quotations end delete begin insert as provided end insert .

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

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

SECTION 1.  

The Legislature finds and declares the following:

(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.

(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.

(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.

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

SEC. 2.  

Section 14838.5 of the Government Code is amended
to read:

14838.5.  

(a) (1) 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 begin insert solicits at least three price quotations from,
and end insert obtains begin insert at least two end insert price quotations from begin insert , end insert two or more
certified small businesses, including microbusinesses, or begin delete from end delete
begin insert from, end insert two or more disabled veteran business enterprises.

begin delete

(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.

(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.

(B) It is the intent of this subdivision to encourage an agency

end delete

begin insert (2) end insert begin insert   end insert begin insert An agency, when exercising the authority provided in
paragraph (1), is encouraged end insert to begin delete award a contract to a business
that has end delete begin insert solicit quotations from businesses that have end insert not previously
contracted with the agency within the prior 12 months.

(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 from responsible suppliers whenever there is
reason to believe a response from a single source is not a fair and
reasonable price.