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DVBE and Small Business Legislation & Executive Orders

Prompt Payment Legislation

Senate Bill 856 was chaptered on October 19, 2010, and impacts California Government Code 927 known as the California Prompt Payment Act.  The Department of General Services is in the process of determining the effects of the chaptered legislation and details are forthcoming.  We are in the process of updating information and references, developing policies, and developing correspondence to define the changes to the Act.

DVBE Legislation

2015 - 2016 Session
  • AB 413 (Chavez) HTML  PDF
    • Modified existing law respecting the provisions of the Disabled Veteran Business Enterprise Program applicable upon the death or permanent medical disability of a disabled veteran who was the majority owner of that enterprise.
    • Established the intent of the Legislature that applicable certification shall not establish any business advantage other than to permit the spouse or child to temporarily control and operate that business in survivorship circumstances.
2011-2012 Session
  • SB 1510 (Wright) HTML  PDF
    • Modified existing law respecting the Commercially Useful Functions requirement of both the Small Business Procurement and Contract Act and the California Disabled Veteran Business Enterprise Program 

2010 - 2011 Session
  •  AB 177 (Ruskin) HTML  PDF
    • Authorizes revocation action on Small Business and Disabled Veteran Business Enterprise firms (DVBE) suspended from doing business with the State of California
    • Increases penalties for program abuse
    • Authorizes the administering agency to forward cases with sufficient grounds to the Attorney General for further action
  • AB 2249 (Ruskin) HTML  PDF
    • Requires those business enterprises to submit certain information under penalty of perjury
    • Contains language regarding unconditional ownership by disabled veteran
    • Established authority for administering agency, if just cause, to have applicant complete and submit federal tax form to obtain federal transcript tax return
 
2009 - 2010 Session
  •  AB 21 (Evans) HTML  PDF
    • Eliminated the good faith effort
    • Requires contractors to meet DVBE goals when specified in solicitations
  • SB 548 (Huff) HTML  PDF
    • Requires the contractor to certify to the awarding department certain contract information and that all payments have been made to DVBE
    • Authorizes the administering agency to oversee the DVBE substitution process

2005-2006 Session
  • SB 115 (Florez)  HTML  PDF
    • This bill specifies that the Department of General Services is the administering agency of the California Disabled Veteran Business Enterprise Program, specifies the duties of the Department in establishing an uniform DVBE participation incentive process to be required by all state agencies when awarding contracts, and sets standards for meeting the program’s participation goals.
    • Requires the department’s small business advocate to provide these services to certified small businesses and certified disabled veteran business enterprises.

2003-2004 Session

  • AB 669 (Cohn)  HTML  PDF
    • A small business, microbusiness, or DVBE prime or subcontractor must perform a "commercially useful function" (CUF) related to the awarded contract's specifications.
    • Increased penalties for fraudulent misrepresentation of a DVBE performing a CUF and/or for misrepresenting the DVBE's participation for obtaining or retaining a contract.
    • The disabled veteran must be domiciled in California.


  • SB 1008 (Machado)  HTML  PDF
    • Limited liability companies must be wholly owned by one or more disabled veterans.
    • 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 Certification (OSDC), a copy of the complete personal federal income tax return for each of the disabled veteran owners.
    • Awarding department shall not rely on a DVBE's certification status if the agency knows that the DVBE does not maintain certification requirements.
    • State funds used for equipment rented from equipment brokers cannot be credited towards the 3% goal.
    • A DVBE broker awarded a contract under the 3% goal provisions must disclose their broker status to the awarding agency prior to contract performance.
    • Disabled veterans must provide federal tax returns for DVBE certification consideration.
    • Penalties for fraud will be imposed.


2001-2002 Session

  • AB 737 (Oropeza)  HTML  PDF
    • Allows state agencies to use informal competitive bidding process for contracts between $5,000 and $99,999, when contract is awarded to a DVBE, after obtaining a price quote from at least two DVBEs.  (Also known as the "SB/DVBE Option".)


  • AB 941 (Florez)  HTML  PDF
    • Requires state agencies/departments to appoint a DVBE advocate.  The appointed individual shall serve as both SB & DVBE advocate.
  • SB 1045 (Polanco)  HTML  PDF
    • Requires state agencies to submit annual DVBE contract & procurement activity report to Governor & Legislature.


1999-2000 Session

  • AB 409 (Dickerson)  HTML  PDF
    • Allows a certified DVBE to retain its status for up to three years after the death or permanent disability of the disabled veteran, if the DVBE is inherited or controlled by the disabled veteran's spouse or child, or by both.  This would only apply to contracts entered into prior to the disabled veteran's death or permanent disability.
    • Dept. of Veterans Affairs to appoint advocate to oversee and report on the DVBE program.
    • Similar provisions to be added to Military and Veterans Code that are in Public Contract Code relating to three percent DVBE participation goal.
  • AB 1633 (Committee on Veterans Affairs)  HTML  PDF
    • Requires any school district using funds allocated pursuant to the School Facilities Act of 1998 for school construction or modernization to have an annual 3% DVBE participation goal of the overall dollar amount expended each year by the school district.

Small Business Legislation

2013-2014 Session

  •  AB 383 (Wagner)  HTML  PDF
    • Maintenance of the codes.
    • This law made nonsubstantive changes in various provisions of the law to effectuate recommendations made by the Legislative Counsel
    • Chapter 76, Section 87, Statutes of 2013: amendments to GC 14837(a) - (e).


2011-2012 Session

  • SB 1510 (Wright) HTML  PDF
    • Modified existing law respecting the Commercially Useful Functions requirement of both the Small Business Procurement and Contract Act and the California Disabled Veteran Business Enterprise Program.
  • ​AB 1783 (Perea) HTML  PDF
    • DGS has sole responsibility to certifying and determining SB eligibility
    • Local agencies will have access to DGS's list of certified small businesses
    • State level certified small business are included as a SB for local preference and goal purposes, and local agencies are authorized to set additional guidelines for local preference purposes


2010- 2011 Session

  • AB 177 (Ruskin) HTML  PDF
    • Authorizes revocation action on Small Business and Disabled Veteran Business Enterprise firms (DVBE) suspended from doing business with the State of California
    • Increases penalties for program abuse
    • Authorizes the administering agency to forward cases with sufficient grounds to the Attorney General for further action

  • AB 2249 (Ruskin) HTML  PDF
    • Requires those business enterprises to submit certain information under penalty of perjury
    • Contains lanugage regarding unconditional ownership by disabled veteran
    • Established authority for adminstering agency, if just cause, to have applicant complete and submit federal tax form to obtain federal transcript tax return


2003-2004 Session

  • AB 323 (Parra)  HTML  PDF
    • Allows Nonprofit Veteran Service Agency (SB/NVSA) to be certified as a small business and entitles the entity to all small business benefits providing certain eligibility requirements are met.


  • AB 2379 (Horton)  HTML  PDF
    • Ineligibility to transact business with state for Small Business program abuse increased from three to 24 months to six to 36 months.


  • AB 669 (Cohn)  HTML  PDF
    • A small business, microbusiness, or DVBE prime or subcontractor must perform a "commercially useful function" related to an awarded contract's specifications.
    • Penalties for fraudulent misrepresention of a small business performing a CUF and/or for misrepresenting the small business' participation for obtaining or retaining a contract.


2001-2002 Session

  •  AB 1084 (Wesson)  HTML  PDF
    • Microbusiness definition.
    • Up to 5% bid preference for non-small business prime contractors who use certified small businesses to meet contract's small business participation goal.
    • Requires 5% small business bid preference be applied to bids awarded on cost and points.
    • Requires state agencies to annually report contract participation by microbusiness as well as by race, ethnicity, and gender on specific contracts.


  •  AB 2567 (Committee on Business and Professions)  HTML  PDF
    • Informal bidding process for construction contracts when awarding to a small business (also known as the "SB/DVBE Option")--contract threshold changed from $200,000 to $100,000 (plus CPI) (per State Contract Act).


1999-2000 Session

  •  AB 1936 (Papan)  HTML  PDF
    • State has 45-day processing time for prompt payment.


  •  AB 2890 (Consumer Protection Committee)  HTML  PDF
    • Dollar threshold for informal bidding process with small business (also known as the "SB/DVBE Option") changed to $5,001 to $99,999.


1997-1998 Session

  •  AB 170 (Papan)  HTML  PDF
    • Prohibits state agencies and vendors from waiving or changing existing prompt payment penalty fees due to the state agency's failure to pay on time.
    • Supplier does not have to submit a separate claim for late payment penalties.


  •  AB 835 (Wright)  HTML  PDF
    • Allows state agencies to use informal competitive bidding process for contracts of $2,500 up to $49,999, when contract is awarded to a small business, after obtaining a price quote from at least two small businesses.  (Also known as the "SB/DVBE Option".)
    • Requires state agencies to include small business 5% bid preference in all information technology solicitations.
    • Modifies annual small business contract activity report to Legislature to include number of employees.


  •  AB 2275 (Kuykendall)  HTML  PDF
    • State agencies must pay properly submitted, undisputed invoices within 45 days or automatically calculate and pay penalties.


  •  AB 2405 (Leach)  HTML  PDF
    • Establishes small business advocate in DGS and each state agency.


  •  AB 2505 (Olberg)  HTML  PDF
    • Establishes new small business definition and allows for updating as necessary, by regulations, to reflect the changing business environment.

Governor's Executive Orders

  • Small Business S-02-06
    • Improve small business participation in State contracting
  • DVBE D-43-01
    • Ensure and improve DVBE participation within state contracting.

Related Legislation

2003-2004 Session

  • AB 79 (Dutra)  HTML  PDF
    • Suspends "Ethnicity, Race, Gender, and MWDVBE" (ERGMWDVBE) report until 1/1/2008.
      NOTE: However, reporting for Small Business, Microbusiness, and DVBE participation and late payment penalties paid continues.  (For more info, click here.)
  • AB 2379 (Horton)  HTML  PDF
    • Increases time a TACPA/EZA/LAMBRA contractor may be ineligible to transact business with the state from a period of 3 months to 2 years to not less than 6 months and no more than 36 months.
    • Authorizes DGS to temporarily remove from list of qualified bidders, a bidder or supplier that has demonstrated a lack of reliability in completing contracts, for a period of 6 to 36 months (increased by 360 days),

2001-2002 Session

  •  AB 185 (Wright)  HTML  PDF
    • Local Area Military Base Recovery Areas technical changes & clarification.

1997-1998 Session

  •  AB 3 (Baca)  HTML  PDF
    • LAMBRA (Local Area Military Base Recovery Act) technical changes & clarification.
  •  AB 835 (Wright)  HTML  PDF
    • TACPA/EZA (Target Area Contract Preference Act/Enterprise Zone Act) technical changes & clarificaiton.
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