Remedial Actions for Non-Compliance with SB/DVBE Goals - 1200.2

Policy

Failure to meet the Small Business (SB) and/or Disabled Veteran Business Enterprise (DVBE) participation goals in three out of five years will result in remedial actions.

Remedial actions are progressive and may include, but are not limited to, the activities outlined below including removal of purchasing authority or placement of additional restrictions on contracting activity.

Procedure

Remedial actions for failure to meet SB/DVBE contracting goals are established, monitored, and reported annually in the Consolidated Annual Report (CAR) by the Office of Small Business and DVBE Services (OSDS). OSDS evaluates goal attainment annually and identifies when goals are not met three out of five years (beginning in fiscal year 2022-23).

Remedial Action Escalation
Level	When It Occurs	Remedial Action Description	Detailed Actions May Include
Level 1	Failure to meet SB/DVBE goals in three of five years, despite making significant efforts.	Initial corrective steps for first-time or continued non-compliance, specifically when reasons were outside the state entity’s control and prevented them from contracting SB/DVBE suppliers.	Assign staff to advocate role Participate in regular meetings with OSDS Work with California Department of Technology (CDT) if needed for contracts subject to CDT’s oversight. Complete specified procurement training Inform OSDS of outreach efforts Advertise SB/DVBE Option contracts Attend specific outreach events Consider adopting SB/DVBE First Policy
Level 2	If goals are still not met after Level 1 and little or no effort was made.	Stronger oversight for repeated non-compliance without sufficient justification.	Review by Calvet of approved (DVBE Exemption Form STD 816) Create outreach plan Set contract-specific goals Submit mid-year progress reports Unbundle large contracts to support SB/DVBE contracting consistent with state contracting laws Identify subcontracting opportunities
Level 3	Continued failure to show improvement	Executive-level involvement for ongoing non-compliance.	Attend mandatory executive level meetings Publicly post on the internet upcoming contracting opportunities Removal of purchasing authority in part
Level 4	If goals are missed for five straight years and two years at Level 3.	Final step after long-term failure.	Removal of purchasing authority, in part or in full Participate in meetings to discuss regaining authority

Documentation must be submitted to OSDS upon request.

Legal Reference

Government Code 14843

Assembly Bill (AB) 2019 (Petrie-Norris, Ch, 730, Stats. 2022)

Related Policy, Procedures & Resources

Broadcast Bulletin – P-04-25 Updated Requirements to the Small Business Procurement and Contract Act

OSDS Best Practices Webinars – SB/DVBE training and resources

Attachments

Not Applicable.

Revisions

No Revisions for this item.