Amended in Assembly April 23, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1734

Introduced by Assembly Member Jones-Sawyer

begin insert

(Coauthors: Assembly Members Chávez, Fox, and Melendez)

end insert

February 14, 2014

An act to add Section 14838.8 to the Government Code, to amend Sections 999, 999.1, 999.2, 999.5, 999.12, and 1104 of begin insert , and to add Section 999.14 to, end insert the Military and Veterans Code, and to amend Sections begin insert 10111, end insert 10115, 10115.13, and 10115.15 of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

AB 1734, as amended, Jones-Sawyer. Public contracts: small business participation: disabled veterans.

(1) The Small Business Procurement and Contract Act requires the Director of General Services and the heads of other state agencies that enter into contracts for the provision of goods, services, and information technology and for the construction of state facilities to establish goals for the participation of small businesses in these contracts, to provide for small business preference in the award of these contracts, to give special consideration and special assistance to small businesses, and, whenever possible, to make awards to small businesses, as specified.

This bill would require all state agencies, departments, boards, and commissions to establish and achieve an annual goal of 25% small business participation in state procurements and contracts, to ensure that the state’s procurement and contract processes are administered in order to meet or exceed the goal, and to report to the Director of General Services statistics regarding small business participation in begin delete his or her end delete begin insert the end insert agency’s procurements and contracts.

The bill would require the Department of General Services to monitor the progress of the agencies toward meeting the goal and to provide this information to the Office of Small Business Advocate.

The bill would also require a state agency, department, board, or commission that has not achieved the goal by the close of the fiscal year to submit begin delete an implementation and end delete begin insert a end insert corrective action plan to the Department of General Services within 45 begin delete days and every year thereafter as long as that agency fails to meet or exceed the goal end delete begin insert days end insert . The bill would require the department, in collaboration with the Office of Small Business Advocate, to undertake reasonable means to assist agencies in improving small business participation in their contracting.

The bill would require all state agencies, departments, boards, and commissions to work with the department to help small businesses market their products, goods, and services to the state by providing access to information about current bid opportunities on their Internet Web sites.

The bill would also require the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development to collaborate with the Department of General Services to cooperatively enhance the state’s small business program by helping small businesses access capital and other financial resources necessary to successfully fulfill state contracts.

The bill begin delete applies end delete begin insert would apply end insert to all state public entities that receive state public funding, including the California State University, the University of California, and the California Community Colleges. In calculating the total amount of contracting covered by this bill, the California State University, the University of California, and the California Community Colleges begin delete will end delete begin insert would end insert only be required to meet the 25% goal for state funding used in contracting.

(2) Existing law requires a state agency, department, officer, or other state governmental entity, to meet an annual statewide participation goal of not less than 3% for disabled veteran business enterprises for specified contracts entered into by the awarding department during the year.

begin delete This end delete begin insert The end insert bill would begin insert gradually end insert increase that participation goal to 5% begin insert by the 2017-18 fiscal year. The bill would require contracts awarded by any state agency, department, officer, or other state governmental entity for goods, services, or information technology for which the expected bid could be over $100,000,000 to have this participation goal, unless the Department of General Services certifies, prior to the issuance of bid requests, that the state agency, department, officer, or other state governmental entity met its disabled veteran business enterprise goal in prior fiscal years, as specified, and will likely meet its disabled veteran business enterprise goal in the current fiscal year end insert .

begin insert

(3) Existing law requires the Director of General Services to adopt written policies and guidelines for state contracting that would provide a disabled veteran business enterprise participation incentive to bidders.

end insert begin insert

The bill would require the incentive provided to a disabled veteran business enterprise prime contractor to be higher than the incentive provided to a prime contractor that is not a disabled veteran business enterprise but that has agreed to use a disabled veteran business enterprise subcontractor.

end insert begin insert

(4) Existing law specifies the duties of the Department of Veterans Affairs with respect to the implementation of the Disabled Veteran Enterprise Program, including, among other things, a requirement to establish a system to track the effectiveness of its efforts to promote the program.

end insert begin insert

The bill would require the department to include in the tracking system a record of those businesses that became certified disabled veteran business enterprises and participated in a state contract within 2 years following the date of a promotional effort.

end insert begin insert

(5) Existing law requires the Secretary of the Department of Veterans Affairs to appoint a California Disabled Veteran Business Enterprise Program Advocate, and each awarding department to appoint an agency Disabled Veteran Business Enterprise Program Advocate, and requires each advocate to perform certain duties relating to the implementation of the of the Disabled Veteran Enterprise Program.

end insert begin insert

This bill would require the California Disabled Veteran Business Enterprise Program advocate to perform additional duties, including meeting regularly with, and assisting, agency Disabled Veteran Business Enterprise Program Advocates, serving as an advocate for the disabled veteran business enterprises, and reporting to the Office of Small Business and Disabled Veteran Business Enterprise Services, as specified. This bill would also require each agency Disabled Veteran Business Enterprise Program Advocate to perform additional duties, including maintaining records of promotional efforts hosted or attended by each agency Disabled Veteran Business Enterprise Program Advocate, as specified, and indicating which of these businesses became certified disabled veteran business enterprises and participated in a state contract.

end insert begin insert

(6) Existing law requires the Department of General Services to make available a report on state agency contracting activity containing certain information.

end insert begin insert

This bill would require the department, for any contracting activity occurring on or after July 1, 2015, to include in that report information of the use of disabled veteran business enterprise utilization plans, as specified. The bill would prohibit the department from approving a vendor’s utilization plan unless the vendor agrees to provide the department with any information the department deems necessary to meet these reporting requirements.

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.  

Section 14838.8 is added to the Government
Code, to read:

14838.8.  

In order to encourage small business participation in
state contracts, all state agencies, departments, boards, and
commissions shall establish and achieve an annual goal of 25
percent small business participation in state procurements and
contracts.

(a) Notwithstanding any other provision of this chapter, the
heads of all state agencies, departments, boards, and commissions
shall ensure that the state’s procurement and contract processes
are administered in order to meet or exceed the 25 percent small
business participation goal, and shall report to the Director of
General Services statistics regarding small business annual
participation in his or her agency’s procurements and contracts.

(b) The Department of General Services shall monitor the
progress of all state agencies, departments, boards, and
commissions toward meeting the 25 percent small business
participation goal. The department shall regularly share information
with the Office of Small Business Advocate on the progress of
each individual agency, department, board, and commission in
meeting the annual goal, including, but not limited to, providing
copies of corrective action plans.

(c) (1) A state agency, department, board, or commission that
has not achieved the 25 percent small business participation goal
by the close of the fiscal year shall submit begin delete an implementation and end delete
begin insert a end insert corrective action plan to the Department of General Services
within 45 begin delete days and annually thereafter as long as that agency fails
to meet or exceed the goal end delete begin insert days end insert .

(2) The Department of General Services, in collaboration with
the Office of Small Business Advocate, shall undertake reasonable
means to assist agencies in improving small business participation
in their contracting, including entering into memoranda of
understanding with the agencies that have not met the goal to
improve performance.

(d) All state agencies, departments, boards, and commissions
shall use the contracting procedure authorized in Section begin delete 14838 end delete
begin insert 14838.5 end insert to contract with small businesses for goods and services
contracts under one hundred thousand dollars ($100,000) and
construction contracts under one hundred twenty thousand dollars
($120,000) whenever possible.

(e) The Department of General Services shall actively promote
small business certification, help small businesses market their
products, goods, and services to the state, and promote the use of
technologies and other innovative solutions for notifying small
businesses of state contracting opportunities, including, but not
limited to, the Subscription Outreach Service of the California
State Contracts Register.

(f) The Department of General Services shall collaborate with
the Office of the Small Business Advocate in the office’s work to
assist small businesses access capital and other financial resources
necessary to successfully fulfill state contracts.

(g) This section applies to all state agencies, departments,
boards, commissions, and other state public entities that receive
state funding including the University of California, the California
State University, and the California Community Colleges. In
calculating the total amount of contracting covered by this section,
the University of California, the California State University, and
the California Community Colleges shall only be required to meet
the 25 percent-goal for state funding used in contracting.

SEC. 2.  

Section 999 of the Military and Veterans Code is
amended to read:

999.  

(a) This article shall be known as, and may be cited as,
the California Disabled Veteran Business Enterprise Program. The
California Disabled Veteran Business Enterprise Program is
established to address the special needs of disabled veterans
seeking rehabilitation and training through entrepreneurship and
to recognize the sacrifices of Californians disabled during military
service. It is the intent of the Legislature that every state
procurement authority honor California’s disabled veterans by
taking all practical actions necessary to meet or exceed the disabled
veteran business enterprise participation goal of a minimum of 5
percent of total contract value.

(b) As used in this article, the following definitions apply:

(1) “Administering agency” means the Treasurer in the case of
contracts for professional bond services, and the Department of
General Services’ Office of Small Business and Disabled Veteran
Business Enterprise Services, in the case of contracts governed by
Section 999.2.

(2) “Awarding department” means a state agency, department,
governmental entity, or other officer or entity empowered by law
to issue bonds or enter into contracts on behalf of the state.

(3) “Bonds” means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by, or
on behalf of, the state.

(4) “Contract” includes any agreement or joint agreement to
provide professional bond services to the State of California or an
awarding department. “Contract” also includes any agreement or
joint development agreement to provide labor, services, materials,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for, and on behalf of,
the state.

(5) (A) “Contractor” means any person or persons, regardless
of race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof that submits a bid and enters into a contract
with a representative of a state agency, department, governmental
entity, or other officer empowered by law to enter into contracts
on behalf of the state. “Contractor” includes any provider of
professional bond services who enters into a contract with an
awarding department.

(B) “Disabled veteran business enterprise contractor,
subcontractor, or supplier” means any person or entity that has
been certified by the administering agency pursuant to this article
and that performs a “commercially useful function,” as defined
below, in providing services or goods that contribute to the
fulfillment of the contract requirements:

(i) A person or an entity is deemed to perform a “commercially
useful function” if a person or entity does all of the following:

(I) Is responsible for the execution of a distinct element of the
work of the contract.

(II) Carries out the obligation by actually performing, managing,
or supervising the work involved.

(III) Performs work that is normal for its business services and
functions.

(IV) Is responsible, with respect to products, inventories,
materials, and supplies required for the contract, for negotiating
price, determining quality and quantity, ordering, installing, if
applicable, and making payment.

(V) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.

(ii) A contractor, subcontractor, or supplier will not be
considered to perform a “commercially useful function” if the
contractor’s, subcontractor’s, or supplier’s role is limited to that
of an extra participant in a transaction, contract, or project through
which funds are passed in order to obtain the appearance of a
disabled veteran business enterprise participation.

(6) “Disabled veteran” means a veteran of the military, naval,
or air service of the United States, including, but not limited to,
the Philippine Commonwealth Army, the Regular Scouts, “Old
Scouts,” and the Special Philippine Scouts, “New Scouts,” who
has at least a 10-percent service-connected disability and who is
domiciled in the state.

(7) (A) “Disabled veteran business enterprise” means a business
certified by the administering agency as meeting all of the
following requirements:

(i) It is a sole proprietorship at least 51-percent owned by one
or more disabled veterans or, in the case of a publicly owned
business, at least 51 percent of its stock is unconditionally owned
by one or more disabled veterans; a subsidiary that is wholly owned
by a parent corporation, but only if at least 51 percent of the voting
stock of the parent corporation is unconditionally owned by one
or more disabled veterans; or a joint venture in which at least 51
percent of the joint venture’s management, control, and earnings
are held by one or more disabled veterans.

(ii) The management and control of the daily business operations
are by one or more disabled veterans. The disabled veterans who
exercise management and control are not required to be the same
disabled veterans as the owners of the business.

(iii) It is a sole proprietorship, corporation, or partnership with
its home office located in the United States, which is not a branch
or subsidiary of a foreign corporation, foreign firm, or other
foreign-based business.

(B) Notwithstanding subparagraph (A), after the death or the
certification of a permanent medical disability of a disabled veteran
who is a majority owner of a business that qualified as a disabled
veteran business enterprise prior to that death or certification of a
permanent medical disability, and solely for purposes of any
contract entered into before that death or certification, that business
shall be deemed to be a disabled veteran business enterprise for a
period not to exceed three years after the date of that death or
certification of a permanent medical disability, if the business is
inherited or controlled by the spouse or child of that majority
owner, or by both of those persons.

(8) “Foreign corporation,” “foreign firm,” or “foreign-based
business” means a business entity that is incorporated or has its
principal headquarters located outside the United States of
America.

(9) “Goal” means a numerically expressed objective that
awarding departments and contractors are required to make efforts
to achieve.

(10) “Management and control” means effective and
demonstrable management of the business entity.

(11) “Professional bond services” include services as financial
advisers, bond counsel, underwriters in negotiated transactions,
underwriter’s counsel, financial printers, feasibility consultants,
and other professional services related to the issuance and sale of
bonds.

SEC. 3.  

Section 999.1 of the Military and Veterans Code is
amended to read:

999.1.  

(a) (1) Notwithstanding any other provision of law,
each awarding department shall have annual statewide participation
goals begin delete of not less than 5 percent end delete begin insert end insert begin insert as specified in paragraph (2) of
subdivision (a) of Section 999.2 end insert for disabled veteran business
enterprises for contracts entered into by the awarding department
during the year for professional bond services. This section shall
not apply if a contract for professional bond services of an
underwriter is to be obtained by competitive bid. However, each
awarding department shall establish goals for contracts to be
obtained by competitive bid for professional bond services.

(2) These goals shall apply to the overall dollar amount
expended by the awarding department with respect to the contracts
for professional bond services relating to the issuance of bonds by
the awarding department, including amounts spent as underwriter’s
discounts.

(b) In attempting to meet the goals set forth in subdivision (a),
the awarding department shall consider establishing cocounsel,
joint venture, and subcontracting relationships, including disabled
veteran business enterprises, in all contracts for professional bond
services. It shall be the responsibility of the head of each awarding
department to be supportive of the Treasurer’s program for
assigning representative portions of professional bond services
contracts for purposes of meeting the goals established pursuant
to this section. However, nothing in this article shall preclude the
awarding department from achieving the goals set forth in this
section without requiring joint ventures, cocounsel, or
subcontracting arrangements.

(c) This section shall not limit the ability of any awarding
department to meet a goal higher than those set forth in subdivision
(a) for the participation of disabled veteran business enterprises
in contracts awarded by the awarding department.

SEC. 4.  

Section 999.2 of the Military and Veterans Code is
amended to read:

999.2.  

(a)  begin insert (1) end insert begin insert   end insert Notwithstanding any other begin delete provision of end delete law,
contracts awarded by any state agency, department, officer, or
other state governmental entity, including school districts when
they are expending state funds for construction, professional
services (except those subject to Chapter 6 (commencing with
Section 16850) of Part 3 of Division 4 of Title 2 of the Government
Code), materials, supplies, equipment, alteration, repair, or
improvement shall have statewide participation goals begin delete of not less
than 5 percent end delete begin insert as specified in paragraph (2) end insert for disabled veteran
business enterprises. These goals apply to the overall dollar amount
expended each year by the awarding department.

begin insert

(2) Statewide participation goals for contracts specified in
paragraph (1) shall be as follows:

end insert begin insert

(A) For the 2014-15 fiscal year, not less than 3.5 percent.

end insert begin insert

(B) For the 2015-16 fiscal year, not less than 4 percent.

end insert begin insert

(C) For the 2016-17 fiscal year, not less than 4.5 percent.

end insert begin insert

(D) For the 2017-18 fiscal year, and each fiscal year thereafter,
not less than 5 percent.

end insert

(b) For purposes of this section:

(1) “Broker” or “agent” means any individual or entity, or any
combination thereof, that does not have title, possession, control,
and risk of loss of materials, supplies, services, or equipment
provided to an awarding department, unless one or more certified
disabled veterans has 51-percent ownership of the quantity and
value of the materials, supplies, services, and of each piece of
equipment provided under the contract.

(2) “Equipment” means any piece of equipment that is used or
provided for rental to any state agency, department, officer, or
other state governmental entity, including equipment for which
operators are provided.

(3) “Equipment broker” means any broker or agent who rents
equipment to an awarding department.

(c) A disabled veteran business enterprise that rents equipment
to an awarding department shall be deemed to be an equipment
broker unless one or more disabled veterans has 51-percent
ownership of the quantity and the value of each piece of equipment.
If the equipment is owned by one or more disabled veterans, each
disabled veteran owner shall, prior to performance under any
contract, submit to the awarding department a declaration signed
by the disabled veteran owner stating that the owner is a disabled
veteran and providing the name, address, telephone number, and
tax identification number of the disabled veteran owner. Each
disabled veteran owner shall submit his or her federal income tax
returns to the administering agency pursuant to subdivision (g) as
if he or she were a disabled veteran business enterprise. The
disabled veteran business enterprise of a disabled veteran owner
who fails to submit his or her tax returns will be deemed to be an
equipment broker.

(d) A disabled veteran business enterprise that rents equipment
to an awarding department shall, prior to performing the contract,
submit to the awarding department a declaration signed by each
disabled veteran owner and manager of the enterprise stating that
the enterprise obtained the contract by representing that the
enterprise was a disabled veteran business enterprise meeting and
maintaining all of the requirements of a disabled veteran business
enterprise. The declaration shall include the name, address,
telephone number, and tax identification number of the owner of
each piece of equipment identified in the contract.

(e) State funds expended for equipment rented from equipment
brokers pursuant to contracts awarded under this section shall not
be credited toward the begin delete 5-percent goal end delete begin insert goals specified in paragraph
(2) of subdivision (a) end insert .

(f) A disabled veteran business enterprise that is a broker or
agent and that obtains a contract pursuant to subdivision (a) shall,
prior to performing the contract, disclose to the awarding
department that the business is a broker or agent. The disclosure
shall be made in a declaration signed and executed by each disabled
veteran owner and manager of the enterprise, declaring that the
enterprise is a broker or agent, and identifying the name, address,
and telephone number of the principal for whom the enterprise is
acting as a broker or agent.

(g) (1) A disabled veteran business enterprise, and each owner
thereof, shall, at the time of certification, submit to the
administering agency complete copies of the enterprise’s federal
income tax returns for the three previous tax years.

(2) A disabled veteran business enterprise, and each owner
thereof, shall submit to the administering agency complete copies
of the enterprise’s federal income tax returns that have a
postcertification due date, on or before the due date, including
extensions.

(3) A disabled veteran business enterprise that, and each owner
thereof who, has not submitted to the administering agency
complete copies of the enterprise’s federal income tax returns for
the three tax years preceding certification nor for each
postcertification tax year for which a return was required to be
filed, shall have 90 days to submit those returns.

(4) A disabled veteran business enterprise that fails to comply
with any provision of this subdivision shall be prohibited from
participating in any state contract until the disabled veteran
business enterprise complies with the provisions of this subdivision.
Funds expended involving a disabled veteran business enterprise
during any period in which that enterprise is not in compliance
with the provisions of this subdivision shall not be credited toward
the awarding department’s begin delete 5-percent goal end delete begin insert goals specified in
paragraph (2) of subdivision (a) end insert .

(h) A disabled veteran business enterprise that fails to maintain
the certification requirements set forth in this article shall
immediately notify the awarding department and the administering
agency of that failure by filing a notice of failure that states with
particularity each requirement the disabled veteran business
enterprise has failed to maintain.

SEC. 5.  

Section 999.5 of the Military and Veterans Code is
amended to read:

999.5.  

(a) The administering agency for the California Disabled
Veteran Business Enterprise Program is the Department of General
Services, except in the case of contracts for professional bond
services. The Department of General Services shall consult with
the California Disabled Veteran Business Enterprise Program
Advocate, appointed by the Secretary of the Department of
Veterans Affairs pursuant to Section 999.11, on all matters relating
to the California Disabled Veteran Business Enterprise Program.
begin delete The end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert Director of General Services shall adopt written policies
and guidelines establishing a uniform process for state contracting
that would provide a disabled veteran business enterprise
participation incentive to bidders. begin insert The incentive provided to a
disabled veteran business enterprise prime contractor shall be
higher than the incentive provided to a prime contractor that is
not a disabled veteran business enterprise but that has agreed to
use a disabled veteran business enterprise subcontractor. end insert The
incentive program shall be used by all state agencies when
awarding contracts.

begin delete

(b)

end delete

begin insert (c) end insert  The Department of Veterans Affairs shall do all of the
following:

(1) Establish a method of monitoring adherence to the goals
specified in Sections 999.1 and 999.2.

(2) Promote the California Disabled Veteran Business Enterprise
Program to the fullest extent possible.

(3) Maintain complete records of its promotional efforts begin insert ,
including, but not limited to, the name, location, size, and type of
business attending or participating in a promotional effort end insert .

(4) Establish a system to track the effectiveness of its efforts to
promote the California Disabled Veteran Business Enterprise
Program, which shall include begin delete regular, end delete begin insert both of the following: end insert

begin insert

(A) A record of those businesses that became certified disabled
veteran business enterprises and participated in a state contract
as either a prime contractor or as a subcontractor within two years
following the date of a promotional effort.

end insert

begin insert (B) end insert begin insert   end insert begin insert Regular, end insert periodic surveys of newly certified disabled veteran
business enterprises to determine how they learned of the program,
why they became certified, and what their experience with
awarding departments has been.

begin insert

(d) The California Disabled Veteran Business Enterprise
Program Advocate shall, in furtherance of the duties required by
subdivision (c) and Section 999.11, do all of the following:

end insert begin insert

(1) Meet regularly with agency Disabled Veteran Business
Enterprise Program Advocates and contract and procurement
staffs of their departments to disseminate information about the
California Disabled Veteran Business Enterprise.

end insert begin insert

(2) Assist agency Disabled Veteran Business Enterprise
Program Advocates with their requirement to assist contract
officers pursuant to subdivision (b) of Section 999.12.

end insert begin insert

(3) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency’s contractors or
subcontractors.

end insert begin insert

(4) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.

end insert begin delete

(c)

end delete

begin insert (e) end insert  An awarding department shall not credit toward the
department’s begin delete 5-percent goal end delete begin insert goals specified in paragraph (2) of
subdivision (a) of Section 999.2 end insert state funds expended on a contract
with a disabled veteran business enterprise that does not meet and
maintain the certification requirements.

begin delete

(d)

end delete

begin insert (f) end insert  Upon completion of an awarded contract for which a
commitment to achieve a disabled veteran business enterprise goal
was made, an awarding department shall require the prime
contractor that entered into a subcontract with a disabled veteran
business enterprise to certify to the awarding department all of the
following:

(1) The total amount the prime contractor received under the
contract.

(2) The name and address of the disabled veteran business
enterprise that participated in the performance of the contract.

(3) The amount each disabled veteran business enterprise
received from the prime contractor.

(4) That all payments under the contract have been made to the
disabled veteran business enterprise. An awarding department shall
keep that certification on file. A person or entity that knowingly
provides false information shall be subject to a civil penalty for
each violation in the minimum amount of two thousand five
hundred dollars ($2,500) and the maximum amount of twenty-five
thousand dollars ($25,000). An action for a civil penalty under this
subdivision may be brought by any public prosecutor in the name
of the people of the State of California and the penalty imposed
shall be enforceable as a civil judgment.

begin delete

(e)

end delete

begin insert (g) end insert  A prime contractor may, subject to the approval of the
Department of General Services, replace a disabled veteran
business enterprise identified by the prime contractor in its bid or
offer, pursuant to subdivision (a) of Section 999.10, with another
disabled veteran business enterprise.

begin delete

(f)

end delete

begin insert (h) end insert  The administering agency shall adopt rules and regulations begin delete ,
including standards for good faith efforts, end delete for the purpose of
implementing this section. Emergency regulations consistent with
this section may be adopted.

SEC. 6.  

Section 999.12 of the Military and Veterans Code is
amended to read:

999.12.  

Each awarding department shall appoint an agency
Disabled Veteran Business Enterprise Program Advocate. This
person shall be the same individual appointed pursuant to Section
14846 of the Government Code. The agency Disabled Veteran
Business Enterprise Program Advocate shall do all of the
following:

(a) Assist certified disabled veteran business enterprises in
participating in that agency’s contracting process.

(b) Assist contract officers in seeking disabled veteran business
enterprises to participate in the agency’s contract and procurement
activities by performing outreach efforts to recruit disabled veteran
business enterprises to offer their services as either a prime
contractor or subcontractor on any contract proposed by the
awarding department that requires disabled veteran business
enterprise participation, and by other feasible means.

(c)  Meet regularly with the California Disabled Veteran
Business Enterprise Program Advocate and contract and
procurement staffs of their departments to disseminate information
about the California Disabled Veteran Business Enterprise
Program.

(d) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency’s contractors or
subcontractors.

(e) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.

(f) Coordinate and meet, on a regular basis, with the California
Disabled Veteran Business Enterprise Program Advocate at the
Department of Veterans Affairs in an effort to meet the statewide
begin delete 5-percent goal end delete begin insert goals end insert provided for in begin insert paragraph (2) of subdivision
(a) of end insert Section 999.2.

begin insert

(g) Maintain records of the promotional efforts hosted or
attended by each agency Disabled Veteran Business Enterprise
Program Advocate, including the name, location, size, and type
of business attending or participating in an event. The records
shall also indicate which of these businesses became certified
disabled veteran business enterprises and participated in a state
contract as either a prime contractor or as a subcontractor within
two years following the date of a promotional effort.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 999.14 is added to the end insert begin insert Military and Veterans
Code end insert begin insert , to read: end insert

begin insert

begin insert 999.14. end insert   

Notwithstanding any other law, contracts awarded by
any state agency, department, officer, or other state governmental
entity for goods, services, or information technology for which the
expected bid could be over one hundred million dollars
($100,000,000) shall have a statewide participation goal as
specified in paragraph (2) of subdivision (a) of Section 999.2,
unless the Department of General Services certifies, prior to the
issuance of bid requests, that the state agency, department, officer,
or other state governmental entity met their disabled veteran
business enterprise goal for two out of the three previous fiscal
years, including the prior fiscal year, and will likely meet their
disabled veteran business enterprise goal in the current fiscal year.

end insert

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 1104 of the Military and Veterans Code is
amended to read:

1104.  

(a) Upon appropriation by the Legislature, money in
the fund shall be used by the Department of Veterans Affairs for
the purpose of designing and constructing veterans’ homes in
California and completing a comprehensive renovation of the
Veterans’ Home at Yountville. Funding from this bond shall be
allocated to fund the state’s matching requirement to construct or
renovate those veterans’ homes in Section 1011 first, and then
fund any additional homes established under this section. These
homes shall be in addition to sites authorized under Section 1011.

(b) Notwithstanding any other begin delete provision of end delete law, construction
contracts awarded for veterans’ homes shall have a statewide
participation goal begin delete of not less than 5 percent end delete begin insert end insert begin insert as specified in
paragraph (2) of subdivision (a) of Section 999.2 end insert for disabled
veteran business enterprises, as defined in Section 999.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 10111 of the end insert begin insert Public Contract Code end insert begin insert is amended
to read: end insert

10111.  

Commencing January 1, 2007, the department shall
make available a report on contracting activity containing the
following information:

(a) A listing of consulting services contracts that the state has
entered into during the previous fiscal year. The listing shall
include the following:

(1) The name and identification number of each contractor.

(2) The type of bidding entered into, the number of bidders,
whether the low bidder was accepted, and if the low bidder was
not accepted, an explanation of why another contractor was
selected.

(3) The amount of the contract price.

(4) Whether the contract was a noncompetitive bid contract,
and why the contract was a noncompetitive bid contract.

(5) Justification for entering into each consulting services
contract.

(6) The purpose of the contract and the potential beneficiaries.

(7) The date when the initial contract was signed, and the date
when the work began and was completed.

(b) The report shall also include a separate listing of consultant
contracts completed during that fiscal year, with the same
information specified in subdivision (a).

(c) The information specified in subdivisions (a) and (b) shall
also include a list of any contracts underway during that fiscal year
on which a change was made regarding the following:

(1) The completion date of the contract.

(2) The amount of money to be received by the contractor, if it
exceeds 3 percent of the original contract price.

(3) The purpose of the contract or duties of the contractor. A
brief explanation shall be given if the change in purpose is
significant.

(d) The level of participation, by agency, of disabled veteran
business enterprises in statewide contracting and shall include
dollar values of contract award for the following categories:

(1) Construction.

(2) Architectural, engineering, and other professional services.

(3) Procurement of materials, supplies, and equipment.

(4) Information technology procurements.

Additionally, the report shall include a statistical summary
detailing each awarding department’s goal achievement and a
statewide total of those goals.

(e) The level of participation by small business in state
contracting including:

(1) Upon request, an up-to-date list of eligible small business
bidders by general procurement and construction contract
categories, noting company names and addresses and also noting
which small businesses also qualify as microbusinesses.

(2) By general procurement and construction contract categories,
statistics comparing the small business and microbusiness contract
participation dollars to the total state contract participation dollars.

(3) By awarding department and general procurement and
construction categories, statistics comparing the small business
and microbusiness contract participation dollars to the total state
contract participation dollars.

(4) Any recommendations for changes in statutes or state
policies to improve opportunities for small businesses and
microbusinesses.

(5) A statistical summary of small businesses and
microbusinesses certified for state contracting by the number of
employees at the business for each of the following categories:
0-5, 26-50, 51-75, and 76-100.

(6) To the extent feasible, beginning in the year 2008, the
number of contracts awarded by the department in the categories
specified in paragraph (5).

(7) The number of contracts and dollar amounts awarded
annually pursuant to Section 14838.5 of the Government Code to
small businesses, microbusinesses, and disabled veteran business
enterprises.

(f) The level of participation of business enterprises, by race,
ethnicity, and gender of the owner, in contracts to the extent that
the information has been voluntarily reported to the department.
In addition, the report shall contain the levels of participation of
business enterprises, by race, ethnicity, and gender of the owner,
and whether the business is a lesbian, gay, bisexual, or transgender
owned business for the following categories of contracts, to the
extent that the information has been voluntarily reported to the
department:

(1) Construction.

(2) Purchases of materials, supplies, or equipment.

(3) Professional services.

(g) In the years 2011 and 2012, any errors reported to the
department by an awarding agency as required by Sections 10302,
10344, and 12104.5, in the previous fiscal year.

begin insert

(h) For contracting activity occurring on or after July 1, 2015,
the use of disabled veteran business enterprise utilization plans
as provided by Section 10115.15. The report shall identify, by
awarding department, the number and financial value of contracts
awarded based upon a disabled veteran business enterprise
utilization plan, the percentage of disabled veteran business
enterprise work committed to in the utilization plan, the number
of audits conducted pursuant to subdivision (b) of Section
10115.15, the number of disapprovals of disabled veteran business
enterprise utilization plans pursuant to subdivision (c) of Section
10115.15, and any other enforcement activities relating to disabled
veteran business enterprise utilization plans during the reporting
period.

end insert begin delete

(h)

end delete

begin insert (i) end insert  The amendments made to this section begin delete by the act adding this
subdivision end delete begin insert by Chapter 861 of the Statutes of 2012 end insert shall apply on
and after January 1, 2013.

begin delete SEC. 8. end delete
begin insert SEC. 10. end insert   

Section 10115 of the Public Contract Code is amended
to read:

10115.  

(a) The Legislature finds and declares all of the
following:

(1) The essence of the American economic system of private
enterprise is free competition. Only through full and free
competition can free markets, reasonable and just prices, free entry
into business, and opportunities for the expression and growth of
personal initiative and individual judgment be assured. The
preservation and expansion of that competition is basic to the
economic well-being of this state and that well-being cannot be
realized unless the actual and potential capacity of minority,
women, and disabled veteran business enterprises is encouraged
and developed. Therefore, it is the declared policy of the state to
aid the interests of minority, women, and disabled veteran business
enterprises in order to preserve reasonable and just prices and a
free competitive enterprise, to ensure that a fair proportion of the
total number of contracts or subcontracts for commodities, supplies,
technology, property, and services are awarded to minority, women,
and disabled veteran business enterprises, and to maintain and
strengthen the overall economy of the state.

(2) The opportunity for full participation in our free enterprise
system by minority, women, and disabled veteran business
enterprises is essential if this state is to attain social and economic
equality for those businesses and improve the functioning of the
state economy.

(3) State agencies which have established short- and long-range
minority, women, and disabled veteran participation goals are
awarding 23 percent or more of their contracts to these business
enterprises.

(4) It is in the state’s interest to expeditiously improve the
economically disadvantaged position of minority, women, and
disabled veteran business enterprises.

(5) The economic position of these businesses can be improved
by providing long-range substantial goals for procurement by state
agencies of commodities, professional services, and construction
work from minority, women, and disabled veteran businesses.

(6) Procurement by state agencies of goods and services from
these businesses also benefits the state agencies and the citizens
of the state by encouraging the expansion of the number of vendors
for procurements, thereby encouraging competition among the
vendors and promoting economic efficiency in the process.

(b) It is the purpose of this article to do all of the following:

(1) Encourage greater economic opportunity for minority,
women, and disabled veteran business enterprises.

(2) Promote competition among state agencies in order to
enhance long-term economic efficiency in the procurement of
construction, commodities, and professional services contracts.

(3) Clarify and expand the program for the procurement by state
agencies of commodities, professional services, and construction
work from minority, women, and disabled veteran business
enterprises.

(c) Notwithstanding any other law, contracts awarded by any
state agency, department, officer, or other state governmental entity
for construction, professional services (except those subject to
Chapter 6 (commencing with Section 16850) of Part 3 of Division
4 of Title 2 of the Government Code), materials, supplies,
equipment, alteration, repair, or improvement shall have statewide
participation goals of not less than 15 percent for minority business
enterprises, not less than 5 percent for women business enterprises begin insert , end insert
and begin delete 5 percent end delete begin insert the percentages specified in paragraph (2) of
subdivision (a) of Section 999.2 of the Military and Veterans Code end insert
for disabled veteran business enterprises. These goals apply to the
overall dollar amount expended each year by the awarding
department, as defined by Section 10115.1, pursuant to this article.

begin delete SEC. 9. end delete
begin insert SEC. 11. end insert   

Section 10115.13 of the Public Contract Code is
amended to read:

10115.13.  

Notwithstanding any other law, contracts awarded
by any state agency, department, officer, or other state
governmental entity for the purchase of general public
advertisements shall have statewide participation goals of not less
than 15 percent for minority business enterprises, not less than
begin delete five end delete begin insert 5 end insert percent for women business enterprises, and begin delete five percent end delete
begin insert the percentages specified in paragraph (2) of subdivision (a) of
Section 999.2 of the Military and Veterans Code end insert for disabled
veteran business enterprises. These goals apply to the overall dollar
amount expended each year by the awarding state agency,
department, offices, or other state governmental entity.

begin delete SEC. 10. end delete
begin insert SEC. 12. end insert   

Section 10115.15 of the Public Contract Code is
amended to read:

10115.15.  

(a) Notwithstanding Section 10115.2, when
awarding contracts for materials, supplies, or equipment, including
electronic data processing goods and services, an awarding
department shall accept the submission by a bidder of a minority,
women, and disabled veteran business enterprise utilization plan
that has been approved prior to the solicitation due date by the
Department of General Services. A business utilization plan shall
be considered approved by the Department of General Services as
of the date submitted to the department so long as the plan meets
the minimum criteria established in paragraphs (1) to (12),
inclusive, and shall be valid for a period of one year, unless the
department has audited the utilization plan, as authorized under
subdivision (b), and disapproves it for reasons specified under
subdivision (c). The decision of whether to establish a minority,
women, and disabled veteran business enterprise utilization plan
shall be at the option of the vendor. If a bidder cites an approved
utilization plan in response to the minority, women, and disabled
veteran business enterprise participation requirements of a
solicitation that calls for 15 percent minority-owned, 5 percent
women-owned, and begin delete 5 percent end delete begin insert the percentages specified in
paragraph (2) of subdivision (a) of Section 999.2 of the Military
and Veterans Code for end insert disabled veteran-owned business
participation, then that utilization plan shall be considered
responsive to the participation goals of the solicitation document.
If a solicitation specifies higher participation goals than those in
the bidder’s utilization plan, the bidder shall meet the goals in the
solicitation. At a minimum, the utilization plan shall include the
following information:

(1) A statement of the vendor’s minority, women, and disabled
veteran business enterprise utilization plan, including the primary
objectives of the utilization plan.

(2) An explanation showing sufficient business reasons why
the vendor did not meet minority, women, and disabled veteran
business enterprise participation goals set forth in the vendor’s
minority, women, and disabled veteran business utilization plan
submitted to, and approved by, the Department of General Services
in the previous year, if applicable. Further, if the vendor did not
meet the minority, women, and disabled veteran business
participation goals in the previous year, the vendor shall also
identify remedial steps it will take to meet the goals in the current
utilization plan.

(3) A statement of the vendor’s minority, women, and disabled
veteran business utilization goals for the succeeding year. At a
minimum, these utilization goals shall be equal to the statewide
participation goals set forth in subdivision (c) of Section 10115.

(4) Estimated total dollars to be subcontracted by the vendor
for sales within the United States for the succeeding year.

(5) Estimated total dollars to be subcontracted by the vendor
for sales within the State of California for the succeeding year.

(6) Total dollars expressed as a percentage of the amount
estimated pursuant to paragraph (4), intended to be subcontracted
with each of the following:

(A) Minority business enterprises.

(B) Women business enterprises.

(7) Total dollars, expressed as a percentage of the amount
estimated pursuant to paragraph (5), intended to be subcontracted
with disabled veteran-owned business enterprises.

(8) A representative listing of the products and services that the
vendor anticipates subcontracting, including an identification of
the types of subcontracting planned for minority, women, and
disabled veteran business enterprises.

(9) The name of the individual employed by the vendor who
will administer the vendor’s utilization plan, including a description
of the duties of the individual.

(10) A description of the efforts that the vendor will undertake
to ensure that minority, women, and disabled veteran business
enterprises will have an equitable opportunity to compete for
contracts.

(11) A listing of the records and reports that the vendor will
maintain to demonstrate the practices and procedures that have
been adopted to comply with the requirements and goals of the
utilization plan.

(12) Affirmation that the vendor met the statewide minority,
women, and disabled veteran business enterprise utilization goals
for the previous year, if applicable.

(b) The Department of General Services shall conduct random
audits of the submitted utilization plans to determine compliance
with this article, and shall retain on file all submitted utilization
plans for auditing purposes. During any audit of a submitted
utilization plan, the Department of General Services may ask a
vendor to submit a list of all the minority, women, and disabled
veteran business enterprises included as subcontractors in the
vendor’s plan for the previous year. This information shall remain
confidential. Nothing in this section shall be construed to require
the Department of General Services to audit all of the minority,
women, and disabled veteran business enterprise utilization plans
submitted by individual vendors. The Department of General
Services may establish appropriate fees to cover the actual costs
of conducting random audits and retaining on file all submitted
plans.

(c) (1) At any time, the Department of General Services may
disapprove a vendor’s minority, women, and disabled veteran
business enterprise utilization plan for any of the following reasons:

(A) The utilization plan fails to evidence a vendor’s intention
to comply fully with the statewide minority, women, and disabled
veteran business enterprise goals for the succeeding year, as
indicated by failure of the utilization plan to contain the information
specified in subdivision (a).

(B) The utilization plan fails to evidence sufficient business
reasons for failure to achieve the minority, women, and disabled
veteran business enterprise goals set forth in a utilization plan
submitted in the previous year, if applicable.

(C) The utilization plan fails to evidence sufficient remedial
steps the vendor will take if the vendor did not meet the minority,
women, and disabled veteran business participation goals in the
previous year, if applicable.

(2) If a vendor’s utilization plan is disapproved, the vendor may
not submit a new utilization plan to the department for a period of
one year from the date of disapproval. Prior to disapproval of a
vendor’s utilization plan, the vendor shall be entitled to a public
hearing and to five days’ notice of the time and place thereof. The
notice shall state the reasons for the hearing.

(3) A vendor that submits a minority, women, and disabled
veteran business utilization plan that is approved by the Department
of General Services, and that is subsequently awarded a contract
to which the vendor would not otherwise have been entitled, and
who fails to evidence intention to fully comply with the minority,
women, and disabled veteran business enterprise goals in the
utilization plan, or fails to evidence sufficient business reasons for
failing to achieve the minority, women, and disabled veteran
business enterprise goals set forth in the utilization plan, shall:

(A) Pay to the state any difference between the contract amount
and what the state’s cost would have been if the contract had been
properly awarded.

(B) In addition to the amount specified in subparagraph (A), be
assessed a penalty in an amount of not more than 10 percent of
the amount of the contract involved.

(C) Be ineligible to transact any business with the state for a
period of not less than three months and not more than 24 months.

Prior to imposition of any sanction under this chapter, the
contractor or vendor shall be entitled to a public hearing and to
five days’ notice of the time and place thereof. The notice shall
state the reasons for the hearing.

begin insert

(d) The Department of General Services shall not approve a
vendor’s utilization plan unless the vendor agrees to provide the
department with any information the department deems necessary
to meet the reporting requirements set forth in subdivision (h) of
Section 10111.

end insert