The state established a DVBE participation goal of at least three percent.  The goal applies to the total contract dollars expended each year by an awarding department.  Each state agency establishes their own method for attaining the goal and they have the discretion to include the program goal within individual contracts.  Every year, state agencies must also report to the governor and the legislature their total DVBE contracting participation.  If the minimum three percent goal is not met, the state agency must provide their reasons for not meeting the goal and an implementation plan for future DVBE participation improvement.  They may also be required to stand before a legislative panel to further clarify their results and efforts.

Added DVBE Incentive, Effective 10/09/07

The Department of General Services (DGS) established a DVBE incentive pursuant to Senate Bill 115 chaptered October 3, 2005 and the Military and Veterans Code section 999.5(a).  The new regulations apply to all competitive solicitations for public works, services, goods, and information technology goods and services posted or released after October 09, 2007.  The DVBE incentive is required in solicitations that include DVBE program requirements and may be offered in other competitive solicitations.

The DVBE incentive offers state agencies a tool to increase their DVBE participation while still allowing the flexibility to exempt a contract from the participation requirement should the department deem it necessary.  Each state agency should incorporate the use of the DVBE incentive into their plan or strategy to ensure achievement of at least three percent DVBE participation on their total contract dollars.

• DVBE Incentive (SB 115)

The "Good Faith Effort"

For each applicable contract, prime contractors must achieve the minimum DVBE participation goal or demonstrate they made a "Good Faith Effort" to achieve participation. The law intends DVBE participation, however should a bid be submitted with less than minimum participation, to be program responsive the prime contractor must make and document their efforts to attain participation.

The five legally defined "Good Faith Effort" steps are:

1. Contact was made with the awarding department to identify DVBEs.
2. Contact was made with other state and federal agencies and with local DVBE organizations to identify DVBEs.
3. Advertising was published in trade papers and papers focusing on DVBEs, unless time limits imposed by the awarding department do not permit that advertising.
4. Invitations to bid were submitted to potential DVBE contractors.
5. Available DVBEs were considered.

Added DVBE Participation Requirements, Effective 1/1/04

• DVBEs must perform a commercially useful function related to the contract's specifications.
• A DVBE that rents equipment to an awarding department is considered an equipment broker, unless one or more disabled veterans own 51% of the equipment with evidence to support the fact.  This includes submitting to the Office of Small Business and DVBE Services (OSDS), a copy of the complete personal federal income tax return for each of the disabled veteran owners.
• DVBE brokers awarded a contract under the 3% goal provisions must disclose their broker status prior to contract performance.
• Equipment rented from DVBE equipment brokers cannot be credited towards the 3% participation goal.
• State agencies must not use a DVBE if the agency knows that the DVBE does not maintain certification requirements.

See DVBE Program Changes and AB 669 Impact on Small Businesses & DVBEs & SB 1008 Impact on DVBEs.

Public Contract Code, Section 10115
Military and Veterans Code, Section 999-999.13
California Code of Regulations, Sections 1896.60-1896.67 and 1896.90-1896.98

Need Help?  Contact Us

Email osdchelp@dgs.ca.gov or call (916) 375-4940.