|
From AB 669: Section 14837 of the Government Code is amended to read:
14837. As used in this chapter:
(a) "Department" means the Department of General Services.
(b) "Director" means the Director of General Services.
(c) "Manufacturer" means a business that is both of the following:
(1) Primarily engaged in the chemical or mechanical
transformation of raw materials or processed substances into new
products.
(2) Classified between Codes 2000 to 3999, inclusive, of the
Standard Industrial Classification (SIC) Manual published by the
United States Office of Management and Budget, 1987 edition.
(d) (1) "Small business" means an independently owned and
operated business that is not dominant in its field of operation, the
principal office of which is located in California, the officers of which
are domiciled in California, and that, together with affiliates, has
100 or fewer employees, and average annual gross receipts of ten
million dollars ($10,000,000) or less over the previous three years,
or is a manufacturer, as defined in subdivision (c), with 100 or
fewer employees.
(2) "Microbusiness" is a small business that, together with
affiliates, has average annual gross receipts of two million five
hundred thousand dollars ($2,500,000) or less over the previous
three years, or is a manufacturer, as defined in subdivision (c), with
25 or fewer employees.
(3) The director shall conduct a biennial review of the average
annual gross receipt levels specified in this subdivision and may
adjust that level to reflect changes in the California Consumer Price
Index for all items. To reflect unique variations or characteristics of
different industries, the director may establish, to the extent
necessary, either higher or lower qualifying standards than those
specified in this subdivision, or alternative standards based on
other applicable criteria.
(4) Standards applied under this subdivision shall be established
by regulation, in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2, and shall preclude
the qualification of businesses that are dominant in their industry.
In addition, the standards shall provide that the certified small
business or microbusiness shall provide goods or services
that contribute to the fulfillment of the contract requirements
by performing a commercially useful function, as defined
below:
(A) A certified small business or microbusiness is deemed to
perform a commercially useful function if the business does
all of the following:
(i) (I) Is responsible for the execution of a distinct element of
the work of the contract.
(II) Carries out its obligation by actually performing,
managing, or supervising the work involved.
(III) Performs work that is normal for its business services
and functions.
(ii) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal
industry practices.
(B) 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 small business or microbusiness participation.
(e) "Disabled veteran business enterprise" means an
enterprise that has been certified as meeting the qualifications
established by subdivision (g) of Section 999 of the Military
and Veterans Code.
From AB 669 Section 14838.6 of the Government Code is repealed.
(Note - this was the old definition of DVBE. Here is the language
that will be repealed as of 1/1/04:
14838.6. (a) For purposes of this chapter, "disabled veteranowned
small business" means a small business concern which is
all of the following:
(1) At least 51 percent owned by one or more disabled veterans.
(2) Managed by, and the daily business operations are controlled
by, one or more disabled veterans.
(b) For purposes of this section, "disabled veteran" means a
person to whom both of the following apply:
(1) The person has served in the United States Air Force, Army,
Navy, Marine Corps, or Coast Guard in time of war, or national
emergency declared by the President of the United States of
America, and who has been discharged or released under
honorable conditions.
(2) The person is currently declared by the United States
Veterans Administration to be 10 percent or more disabled as a
result of service in the armed forces.).
From AB 669 Section 14839 of the Government Code is amended to read:
14839. There is hereby established within the department the
Office of Small Business and Disabled Veteran Business
Enterprise Services. The duties of the office shall include:
(a) Compiling and maintaining a comprehensive bidders list of
qualified small businesses and disabled veteran business
enterprises, and noting which small businesses also qualify as
microbusinesses.
(b) Coordinating with the Federal Small Business Administration,
the Minority Business Development Agency, and the Office of
Small Business Development of the Department of Economic and
Business Development.
(c) Providing technical and managerial aids to small businesses,
microbusinesses, and disabled veteran business enterprises, by
conducting workshops on matters in connection with government
procurement and contracting.
(d) Assisting small businesses, microbusinesses, and disabled
veteran business enterprises, in complying with the procedures
for bidding on state contracts.
(e) Working with appropriate state, federal, local, and private
organizations and business enterprises in disseminating
information on bidding procedures and opportunities available to
small businesses, microbusinesses, and disabled veteran
business enterprises.
(f) Making recommendations to the department and other state
agencies for simplification of specifications and terms in order to
increase the opportunities for small business, microbusiness, and
disabled veteran business enterprise participation.
(g) Develop, by regulation, other programs and practices that are
reasonably necessary to aid and protect the interest of small
businesses, microbusinesses, and disabled veteran business
enterprises in contracting with the state.
(h) The information furnished by each contractor requesting a
small business or microbusiness preference shall be under penalty
of perjury.
From AB 669 Section 14842 of the Government Code is amended to read:
14842. (a) A business that has obtained classification as a small
business or microbusiness by reason of having furnished incorrect
supporting information or by reason of having withheld information,
and that knew, or should have known, the information furnished
was incorrect or the information withheld was relevant to its request
for classification, and that by reason of that classification has been
awarded a contract to which it would not otherwise have been
entitled, shall do all of the following:
(1) Pay to the state any difference between the contract amount
and what the state's costs would have been if the contract had
been properly awarded.
(2) In addition to the amount described in subdivision (a), be
assessed a penalty in an amount of not more than 10 percent of
the amount of the contract involved.
(3) Be ineligible to transact any business with the state either
directly as a prime contractor or indirectly as a subcontractor,
for a period of not less than three months and not more than 24
months. State agencies may reject the bid of a supplier offering
goods, information technology, or services manufactured or
provided by a subcontractor if that subcontractor has been
declared ineligible to transact any business with the state
under this chapter, even though the bidder is a business in
good standing.
(b) All payments to the state pursuant to paragraph (1) of
subdivision (a) shall be deposited in the fund out of which the
contract involved was awarded.
(c) All payments to the state pursuant to paragraph (2) of
subdivision (a) shall be deposited in the state General Fund.
(d) The small business certification of a business found to
have violated the provisions of subdivision (a) shall be
revoked for a period of not less than one year. For an
additional or subsequent violation, the period of certification
revocation or suspension shall be extended for a period of up
to three years. The revocation shall apply to the principals of
the business and any subsequent businesses formed by those
principals.
(e) Prior to the imposition of any sanctions under this article, a
business shall be entitled to a public hearing and to at least five
working days' notice of the time and place thereof. The notice shall
state the reasons for the hearing.
From AB 669 Section 14842.5 of the Government Code is amended to read:
14842.5. (a) It shall be unlawful for a person to do any of the
following:
(1) Knowingly and with intent to defraud, fraudulently obtain,
retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain, certification
as a small business or microbusiness enterprise for the purposes
of this chapter.
(2) Willfully and knowingly make a false statement with the intent
to defraud, whether by affidavit, report, or other representation, to a
state official or employee for the purpose of influencing the
certification or denial of certification of any entity as a small
business or microbusiness enterprise.
(3) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a business entity that has
requested certification as a small business or microbusiness
enterprise.
(4) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person in fraudulently obtaining or
attempting to obtain, public moneys to which the person is not
entitled under this chapter.
(5) Knowingly and with intent to defraud, fraudulently
represent certified small business or microbusiness
participation in order to obtain or retain a bid preference or a
state contract.
(6) Knowingly and with intent to defraud, fraudulently
represent that a commercially useful function is being
performed by a certified small business or microbusiness in
order to obtain or retain a bid preference or a state contract.
(b) Any person who is found by the department to have violated
any of the provisions of subdivision (a) is subject to a civil penalty
of not more than five thousand dollars ($5,000).
(c) Any person who violates subdivision (a) shall, if certified
as a small business or a microbusiness, have the business'
certification revoked for a period of not more than one year,
and shall, in addition to the penalties provided for in
subdivision (b), be suspended from bidding on, or
participating as a contractor, a subcontractor, or a supplier in,
any state contract or project for a period of not less than three
months nor more than 24 months. However, for an additional
or subsequent violation, the period of certification revocation
or suspension shall be extended for a period of up to three
years. The certification revocation shall apply to the
principals of the business and any subsequent businesses
formed by those principals. Any business or person who fails
to satisfy the penalties imposed pursuant to subdivisions (b)
and (c) shall be prohibited from further contracting with the
state until the penalties are satisfied.
(d) If a contractor, subcontractor, supplier, subsidiary, or affiliate
thereof, has been found by the department to have violated
subdivision (a) and that violation occurred within three years of
another violation of subdivision (a) found by the department, the
department shall prohibit that contractor, subcontractor, supplier,
subsidiary, or affiliate thereof, from entering into a state project or
state contract and from further bidding to a state entity, and from
being a subcontractor to a contractor for a state entity and from
being a supplier to a state entity.
From AB 669 Section 999 of the Military and Veterans Code is amended to read:
999. As used in this article, the following definitions apply:
(a) "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.
(b) "Awarding department" means any 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 of
California.
(c) "Bonds" means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by or on
behalf of the State of California.
(d) "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, material,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for and on behalf of
the State of California.
(e) (1) "Contractor" means any person or persons, regardless of
race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, or age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof who 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 of California. "Contractor" includes any provider
of professional bond services who enters into a contract with an
awarding department.
(2) "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:
(A) A person or an entity is deemed to perform a
"commercially useful function" if a person or entity does all of
the following:
(i) (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.
(ii) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal
industry practices.
(B) 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 disabled veteran business enterprise
participation.
(f) "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 of California.
(g) (1) "Disabled veteran business enterprise" means a business
certified by the administering agency as meeting all of the following
requirements:
(A) 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 owned by one or more
disabled veterans; a subsidiary which is wholly owned by a parent
corporation, but only if at least 51 percent of the voting stock of the
parent corporation is owned by one or more disabled veterans; or a
joint venture in which at least 51 percent of the joint venture's
management and control and earnings are held by one or more
disabled veterans.
(B) 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.
(C) 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 foreignbased
business.
(2) Notwithstanding paragraph (1), 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.
(h) "Foreign corporation," "foreign firm," and "foreign-based
business" means a business entity that is incorporated or has its
principal headquarters located outside the United States of
America.
(i) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to
achieve.
(j) "Management and control" means effective and demonstrable
management of the business entity.
(k) "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.
From SB 1008 Section 999.2 of the Military and Veterans Code is amended to
read:
999.2. (a) Notwithstanding any other provision of 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 of not less than 3 percent
for disabled veteran business enterprises. These goals apply to
the overall dollar amount expended each year by the awarding
department.
(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 3-percent goal.
(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 3-percent goal.
(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.
From SB 1008 Section 999.5 of the Military and Veterans Code is amended to
read:
999.5. (a) The administering agency shall establish a method of
monitoring adherence to the goal specified in Section 999.1,
including requiring a followup report from all contractors upon the
completion of any sale of bonds.
(b) The awarding department shall establish a method of
monitoring adherence to the goals specified in Section 999.2.
(c) An awarding department shall not credit toward the
department's 3 percent goal state funds expended on a
contract with a disabled veteran business enterprise that does
not meet and maintain the certification requirements.
(d) The administering agency shall adopt rules and regulations,
including standards for good faith efforts, for the purpose of
implementing this section. Emergency regulations consistent with
this section may be adopted.
From AB 669 Section 999.6 of the Military and Veterans Code is amended to
read:
999.6. In implementing this article, the awarding department
shall utilize existing resources such as the Office of Small
Business and Disabled Veteran Business Enterprise Services,
the Department of Veterans Affairs, the federal Department of
Veterans Affairs, and the Small Business Administration.
From SB 1008 Section 999.7 of the Military and Veterans Code is amended to
read:
999.7. (a) (1) On January 1 of each year, each awarding
department shall report to the Governor, the Legislature, the
Department of General Services, and the Department of Veterans
Affairs on the level of participation by disabled veteran business
enterprises in contracts identified in this article for the previous
fiscal year.
(2) If the awarding department has not met the established goals
for that year, the awarding department shall report to the
Legislature, the Department of General Services, and the
Department of Veterans Affairs the reasons for the awarding
department's inability to achieve the goals and shall identify steps it
shall take in an effort to achieve the goals.
(b) On April 1 of each year, the Department of General Services
shall prepare for the Governor, the Legislature, and the
Department of Veterans Affairs a statewide statistical summary
detailing each awarding department's goal achievement and a
statewide total of those goals.
From SB 1008 Section 999.9 of the Military and Veterans Code is amended to
read:
999.9. (a) It shall be unlawful for a person to:
(1) Knowingly and with intent to defraud, fraudulently obtain,
retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain, certification
as a disabled veteran business enterprise for the purpose of this
article.
(2) Willfully and knowingly make a false statement with the intent
to defraud, whether by affidavit, report, or other representation, to a
state official or employee for the purpose of influencing the
certification or denial of certification of any entity as a disabled
veteran business enterprise.
(3) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a business entity that has
requested certification as a disabled veteran business enterprise.
(4) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person in fraudulently obtaining or
attempting to obtain, public moneys, contracts, or funds
expended under a contract, that are awarded by any state
agency, department, officer, or other state governmental
agency, to which the person is not entitled under this article.
(5) Knowingly and with intent to defraud, fraudulently represent
participation of a disabled veteran business enterprise in order to
obtain or retain a bid preference or a state contract.
(6) Willfully and knowingly make or subscribe to any
statement, declaration, or other document that is fraudulent or
false as to any material matter, whether or not that falsity or
fraud is committed with the knowledge or consent of the
person authorized or required to present the declaration,
statement, or document.
(7) Willfully and knowingly aid or assist in, or procure,
counsel, or advise, the preparation or presentation of a
declaration, statement, or other document that is fraudulent or
false as to any material matter, regardless of whether that
falsity or fraud is committed with the knowledge or consent of
the person authorized or required to present the declaration,
statement, or document.
(8) Willfully and knowingly fail to file any declaration or
notice with the awarding agency that is required by Section
999.2.
(9) Establish, or knowingly aid in the establishment of, or exercise
control over, a firm found to have violated any of paragraphs (1) to
(8), inclusive.
(b) Any person who violates any of the provisions of subdivision
(a) shall be guilty of a misdemeanor punishable by imprisonment in
the county jail not exceeding six months or by a fine not exceeding
one thousand dollars ($1,000), or by both. In addition, the person
shall be liable for a civil penalty of not less than ten thousand
dollars ($10,000) nor more than thirty thousand dollars
($30,000) for the first violation, and a civil penalty of not less
than thirty thousand dollars ($30,000) nor more than fifty
thousand dollars ($50,000) for each additional or subsequent
violation. A defendant who violates any of the provisions of
subdivision (a) shall pay all costs and attorney's fees incurred
by the plaintiff in a civil action brought pursuant to this
section.
(c) (1) The Department of General Services shall suspend any
person who violates subdivision (a) from bidding on, or participating
as either a contractor, subcontractor, or supplier in, any state
contract or project for a period of not less than three years, and if
certified as a disabled veteran business enterprise, the
department shall revoke the business' certification for a
period of not less than three years. An additional or
subsequent violation shall extend the periods of suspension
and revocation for a period of not less than five years. The
suspension and revocation shall apply to the principals of the
business and any subsequent business formed or financed
by, or affiliated with, those principals.
(2) The Department of General Services shall prohibit any
business or person who fails to satisfy the penalties, costs, and
attorney's fees imposed pursuant to subdivision (b) from further
contracting with the state until the penalties are satisfied.
(d) The awarding department shall report all alleged violations of
this section to the Department of General Services. The
Department of General Services shall subsequently report all
alleged violations to the Attorney General who shall determine
whether to bring a civil action against any person or firm for
violation of this section.
(e) The Department of General Services shall monitor the status
of all reported violations and shall maintain and make available to
all state departments a central listing of all firms and persons who
have been determined to have committed violations resulting in
suspension.
(f) No awarding department shall enter into any contract with any
person suspended for violating this section during the period of the
person's suspension. No awarding department shall award a
contract to any contractor utilizing the services of any person as a
subcontractor suspended for violating this section during the period
of the person's suspension.
(g) The awarding department shall check the central listing
provided by the Department of General Services to verify that the
person or contractor to whom the contract is being awarded, or any
person being utilized as a subcontractor or supplier by that person
or contractor, is not under suspension for violating this section.
From SB 1008 Section 10115.9 is added to the Public Contract Code, to read:
10115.9. A limited liability company may be certified as a
disabled veteran business enterprise pursuant to this article if
the limited liability company is wholly owned by one or more
disabled veterans.
|
