Small Business Legislation

Below is a list of the new legislation that directly effects small businesses. To access the complete bill text go to http://leginfo.ca.gov/bilinfo.html. Once at the legislative bill information website, click on the Bill Information button. Insert the bill number and click on the 'search' button. Cursor down to the chaptered version and click on the 'html' or 'pdf' links. Use whichever document best fits your current Internet capabilities.

• Assembly Bill 3 (Baca)

  Set ups the Local Area Military Base Recovery Act (LAMBRA), which includes preferences patterned after the TACPA/EZA preferences. The LAMBRA preference applies to goods and services, but only if the contract is going to be more than $100,000.

• Assembly Bill 835 (Wright)

  State agencies may contract with small businesses for goods, services and information technology from $2,500 to $50,000 without advertising or conducting a formal procurement, so long as they have obtained price quotations from two responsible and responsive certified small business suppliers. Also includes Target Area Contact Preference Act (TACPA) and Enterprise Zone Act (EZA) preference clean-up language. Small Business Participation is enhanced through the State Agency Delegated Purchasing Authority Program. Specific requirements for commodities and information technology are listed below:

  • Commodities - The required bid level will be increased from $1,000 to $2,500. All transactions exceeding $2,500 will require a minimum of two quotes and the file documented accordingly. The maximum order remains at $15,000 unless you are utilizing the new authority granted under Government Code 14838.5 (a) and (b).
  • Information Technology - The required bid level will be $2,500; therefore, goods or services may be purchased up to that level referencing a single supplier. Previously, only sole sources were allowed for proprietary software.
  • Services - As enrolled, AB 835 conflicts with current public contracting requirements that make its use for the procurement of services problematic. There is currently clean-up language being drafted to remove these conflicts. In the meantime, it is the recommendation of the Office of Legal Services that AB 835 NOT be used for services or consulting services contracts. For clarification, call your Office of Legal Services. (OLS) Attorney.

• Assembly Bill 2275 (Kuykendall)

  The new California Prompt Payment Act dictates that state agencies will:

  • Make timely payments or automatically calculate and pay interest penalties.
    
  • Encourage contractors to promptly pay small business subs.
    
  • Not ask suppliers to waive, alter, or limit penalties.
    
  • Report annually to the Department of General Services on the number and dollar amount of late payment penalties paid. The Department of General Services shall make the report public information.
    

  Late payment penalties accrue even if the Budget Act has not been signed.

• Assembly Bill 2405 (Leach)

  Establishes Small Business Advocates in each state agency with an annual contracting program of $100,000 or more. The appointment is to be made within existing resources. To effectively perform the advocate responsibilities and promote small business contracting participation, the Small Business Advocate must have access to executive management and input regarding contracting policies and procedures.

  At a minimum State Agency Small Business Advocates shall:

  • Make contract solicitation information available to and consider offers from capable small businesses. The Office of Small Business and DVBE Certification  certifies small businesses and a small business listing is available for networking and marketing queries.
    
  • Ensure prompt payment to small business.
    
  • Consider small businesses under the California Multiple Award Schedule (CMAS) prior to contracting.
    
  • Identify and implement innovative acquisition processes to further small business participation.
    
  • Appropriately prepare solicitations for simplification, efficiency, expedience and cost effectiveness of response.
    

  The Department of General Services Small Business Advocate role will be administered by the Office of Small Business and DVBE Certification (OSDC). Their responsibilities are as follows:

  • Assist small businesses by providing the following information:
    • Identification of potential small business subcontractors and potential subcontracting opportunities. Small businesses are certified by the OSDC and a small business listing is available for networking and marketing queries. The California State Contracts Register (CSCR) will be introducing prime contractor and subcontractor advertisements linked to the current government contracting opportunities advertised. These new CSCR services will be available early 1999.
      
    • Solicitation protest procedures and timelines. The OSDC will be adding protest information to our Internet offerings, in the Business Guide to State Contracting, articles in the OSDC Communicates newsletter and in business community training.
      
    • Prompt payment procedures. The OSDC will be updating and offering prompt payment information in our Internet offerings, in the Business Guide to State Contracting, articles in the OSDC Communicates newsletter and in business community training.
  • Develop and maintain a California Multiple Award Schedule (CMAS) outreach and education program. The OSBCR and the DGS Procurement Division will partner to carry out this responsibility. The Procurement Division is the administrator for the CMAS program.
  • Ensure small business participation when establishing contracts consolidating the needs of multiple state agencies or repetitive state purchases.
    
  • Establish a training and development program for acquisition professionals.
    
  • Establish a recognition and awards program for state employee's promoting small business participation in state contracting.
    
  • Prepare and maintain a directory of certified small businesses. Small Businesses are certified by the Office of Small Business and DVBE Certification and a small business listing is available for networking and marketing queries.
    
  • Make recommendations for Small Business Participation Program improvements and increased participation of small businesses in state contracting.

• Assembly Bill 2505 (Olberg)

Establishes a clear, uniform definition of "small business" in statute for use in the state's small business program. The small business definition requirements are listed below:

• An independently owned and operated business.
  
• Not dominant in its field of operation.
  
• The principal office is located in California.
  
• The officers are domiciled in California.
  
• Together with affiliates is either:
  
  • A service, construction or non-manufacturing business with 100 or fewer employees, and average annual gross receipts of ten million dollars ($10,000,000) or less over the previous three years, or
    
  • A manufacturer with 100 or fewer employees.

• The definition of a "manufacturer" refers to a business that is both of the following:

  • Primarily engaged in the chemical or mechanical transformation of raw materials or processed substances into new products.
    
  • 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.