State Wide Annual Report

In compliance with the Military and Veterans Code (M&VC) Section 999.7, the Department of General Services (DGS), Procurement Division prepared the enclosed Disabled Veteran Business Enterprise (DVBE) Statewide Statistical Annual Report for Fiscal Year 2002/2003.

If you need further information or assistance, please contact Patricia Connors, Manager, Office of Small Business/Disabled Veteran Business Enterprise Utilization and Development, Small Business and Disabled Veteran Business Enterprise Services Branch, Procurement Division, Department of General Services, at (916) 375-4937.

This report on the participation of Disabled Veteran Business Enterprise (DVBE) firms in state contracting for Fiscal Year 2002/2003 is hereby submitted to the Legislature by the Department of General Services (DGS) pursuant to the requirements of Military and Veterans Code (M&VC) Section 999.7. This report provides data, and details, of the DVBE participation in state contracting.

Overview of DVBE Participation
Number of Firms Certified as DVBEs
Departments with Significant Improvement in DVBE Participation
State Contracting Recognition Awards
New Legislation Impacting the DVBE Program
State Agency DVBE Participation

In Fiscal Year 2002/2003, the State of California awarded $142,670,222 in contracts to certified DVBEs. This represents 2.70 percent of the $5,282,419,094 awarded to all contractors. The percentage share decreased from 2.80 percent in fiscal year 2001/2002.

During the Fiscal Year 2002/2003 the number of California certified DVBE firms rose from 832 to 973, an increase of 17 percent over the previous fiscal year.

Government Code (GC) Section 14845 requires the DGS to recognize state employees who make an outstanding contribution to the state's overall effort to increase the level of small business participation in state contracting. Although not required to do so by statute, the DGS also recognizes state agencies that develop and implement innovative programs that increase participation of small businesses in state contracting. These awards took place on October 2, 2003, in West Sacramento, California.

The awards were held to recognize the outstanding achievements of six state agencies for developing and implementing effective programs to promote increased contracting opportunities for small businesses and DVBEs.

A panel of three judges from the private sector and professional organizations selected six state agencies to receive the Gold, Silver, and Bronze awards from a group of 40 nominees.

Their final selections resulted in one first-place award (the Gold Award), two secondplace awards (the Silver Award), and three third-place awards (the Bronze Award). Special certificates were also presented to the remaining nominated agencies acknowledging their participation and support of the state's small business and DVBE programs.

• Department of the California Highway Patrol (CHP)

In direct response to executive management's dedication to increasing certified business participation, the Business Services Unit worked closely with the Certified Business Advocacy Unit to meet or exceed the participation goals established by the Governor. Although all units under the Business Services Section have shown improvement, the organization's Purchasing Services Unit, in particular, applied the drive and tenacity needed to meet, as well as surpass, the CHP certified small business participation goals. The Purchasing Services Unit makes use of personal contacts, education, and one-on-one assistance to CHP personnel to help them understand the importance of the small business and DVBE programs and to help them identify small business and DVBE suppliers for their requirements. The organization exhausts all resources to ensure small businesses and DVBEs are considered for procurement awards to the maximum extent possible. This effort includes using the DGS' certified business inquiry, as well as networking with other departments, agencies, and the CHP's area offices before awarding procurements and contracts to non-certified businesses. The organization reviews and investigates every requisition to ensure a certified small or DVBE business has been solicited. For Fiscal Year 2002/2003, the Purchasing Services Unit awarded nearly 4,000 procurements totaling over $74 million. Forty-eight percent of those awards went to small businesses and two-and-a-half percent went to DVBEs. The CHP's CAL-Card coordinator worked with the organization's Certified Business Advocacy Unit with the specific goal of increasing certified small business and DVBE participation in commodity purchases and contract services, using CAL-Card. With CAL-Card as the primary method of obtaining office and janitorial supplies, during Fiscal Year 2002/2003, of the nearly 5,000 credit card purchases made, approximately 69 percent were from small businesses, and 34 percent were from DVBEs.

• Department of Transportation (DOT)

The DOT developed and designed its small business website to provide the small business owner with a one-stop resource for information about doing business with DOT and other state agencies. The DOT developed the website in recognition of the need for small businesses to be able to electronically access information about how to do business with the State of California. This website provides an effective way for the small business owner to learn, at his or her convenience, about the state's contracting and procurement processes and opportunities. The website enables the small business owner to navigate through and understand the full range of state processes involved and to identify contracting opportunities not only with DOT, but also with other agencies and prime contractors. The Director of the DOT's District 6, Central Region, was the driving force behind development of the web page and for applying consistent executive-level support, and creating an environment that fosters new ideas. One of those ideas that have proven to be very fruitful was the development of a partnership with the Department of Corrections (CDC) to maximize resources to facilitate expanding the combined organization's activities to outlying areas. The partnership also provides a forum for the partners to share ideas and to present their respective needs to small businesses and DVBEs at local community supplier workshops.

• Department of Corrections' Folsom State Prison (CDC)

The CDC Folsom State Prison two-day outreach and education presentation, "How to Increase Participation of Small Businesses and Disabled Veteran Businesses in the Procurement of Goods and Services," was specifically designed to develop a better understanding among the Folsom Prison staff of the various ways to achieve the organization's small business and DVBE participation goals, and to instill in the staff the firm belief that the goals are achievable. The presentation also imparts a clear understanding of the full magnitude of the CDC's buying power and how awarding contracts and procurements to small businesses and DVBEs has a major impact on the state's economy. Their program includes ongoing and comprehensive training, the use of custom-made target-suppliers bidders' lists that contain only those that provide items that all CDC facilities normally buy. Folsom's program also includes extensive outreach activities designed to educate suppliers about the program and to familiarize them with the organization's overall goods requirements. The outreach activities are also designed to connect the suppliers with the right procurement professionals. To measure progress, Folsom's program also includes a quarterly small business and DVBE participation report to management and staff.

• Department of Consumer Affairs (DCA)

The DCA established the requirement for each of its organizations -its boards, bureaus, divisions and programs ? to develop and execute an annual small business and DVBE participation plan to be submitted by June of each year, covering the 12 months of the next fiscal year beginning on July 1. To ensure the plans would be accomplished to the maximum extent possible, DCA established a procedure that requires each organization to first consider small businesses and DVBEs for specific procurements and contracts. Coupled with this requirement, DCA also implemented a form that each organization must use for requesting an exemption from awarding a procurement or contract to a small business or DVBE supplier. The form requires thorough documentation that supports the request and it must be reviewed and approved by DCA's Small Business and DVBE advocate. The DCA also established a review process, whereby the advocate tracks each organization's procurements and contracts and the use of small business and DVBE suppliers. The advocate provides monthly reports to the organizations, indicating their attainment percentages, and presents a certificate of award to each organization that achieves its planned participation goals.

• Business, Transportation and Housing Agency (BTH)

The BTH Agency forged public and private partnerships with the objective of increasing opportunities for small businesses and DVBEs to participate in state procurement and contracting. In addition to having an aggressive small business and DVBE program for the agency's 14 departments and offices, the Agency has held small business forums and community/department meetings to spread the word about the programs, their importance, and the Agency's expectations. The Agency's small business and DVBE program manager conducted extensive networking with key organizations to enlist their support and involvement - organizations such as the National Association of Women Business Owners Executive Committee, the California Small Business Roundtable, the California Small Business Association, the California Black Chamber of Commerce, the California Hispanic Chamber of Commerce, and the Latino Caucus. The Agency has consistently surpassed the 25 percent small business goal and the three percent DVBE goal.

• Department of General Services' Office of Risk and Insurance Management
  (ORIM)

The DGS' ORIM increased its small business participation over the past five years through concentrated customer service that focuses on helping small businesses become certified and through constant review of the organization's contracting and procurement activities to ensure that small businesses are given every opportunity to compete for awards for which they qualify. ORIM has taken advantage of the streamlined bidding process under Senate Bill 1049, (Chapter 775, Statutes of 2000, GC Section 14838.5), to encourage awards to certified small businesses. ORIM's Small Business and DVBE advocate initiated the practice of personally calling each small business contractor that is not certified and walking them through the certification application process. The advocate then follows up with each contractor to ensure that its certification application has been approved. The advocate also established the practice of calling contactors whose certifications are nearing expiration, reminding them to apply for renewals. ORIM also implemented focused efforts to ensure that their procurements for goods were awarded to certified small business suppliers to the maximum extent possible.

Assembly Bill (AB) 669 and Senate Bill (SB) 1008 were signed by the Governor and became effective on January 1, 2004, amending and adding language to M&VC Section 999.

AB 669 requires that small businesses and DVBEs perform a commercially useful function in relation to any state contract that it is awarded, or works on as a subcontractor; defines "commercially useful function" for this purpose; and, provides for penalties for violators.

SB 1008 requires proof of California domicile for certification eligibility; precludes businesses that do not own at least 51 percent of the value and quantity of equipment rented to the state from being eligible for DVBE certification; precludes Limited Liability Companies (LLC) from being eligible for DVBE certification unless they are wholly owned by disabled veterans; defines "equipment broker" and "broker" and states that business done by state agencies with equipment brokers cannot be claimed towards achieving the three percent annual DVBE goal; provides that the DGS may suspend contractors from doing business with the state under specified circumstances; and, increases the sanctions that can be levied against fraudulent DVBEs.

The total contract award dollars and the percentage of DVBE participation achieved by each of the reporting agencies are shown on the following pages. Also included are the breakdown of awards by commodities, services, and construction contracts for each agency; the DVBE participation by dollars in each category; and, the total contract award dollars less than $25,000 and the percentage of DVBE participation achieved.