SB 1179: Public contracts: Disabled Veteran Business Enterprise Program.

Under existing law, the Department of General Services, except in the case of contracts for professional bond services, is the administering agency of the California Disabled Veteran Business Enterprise Program, which requires state agencies and all other state entities contracting for materials, supplies, equipment, alteration, repair, or improvement to have at least 3% participation goals for disabled veteran business enterprises (DVBE), as defined. Existing law requires an awarding department, upon completion of an awarded contract for which a commitment to achieve a DVBE goal was made, to require the prime contractor that entered into a subcontract with a DVBE to certify to the awarding department specified information relating to amounts paid under the contract, as specified. Existing law subjects a person or entity that knowingly provides false information on this certification to certain criminal and civil penalties, as specified.

Existing law makes it a crime to, among other things, knowingly and with intent to defraud, fraudulently represent participation of a disabled veteran business enterprise in order to obtain or retain a bid preference or a state contract. Existing law requires the Department of General Services to suspend, for a specified period, any person who violates these provisions from bidding on, or participating as either a contractor, subcontractor, or supplier in, any state contract or project, as specified. Existing law requires the Department of General Services to monitor the status of all reported violations and maintain and make available to all state departments a central listing of all firms and persons who have been determined to have committed violations resulting in suspension. Existing law prohibits an awarding department from entering into any contract with any person suspended for violating these provisions during the persons suspension and requires the awarding department to check the central listing provided by the Department of General Services to verify that the person or contractor to whom the contract is being awarded, or any person being utilized as a subcontractor or supplier by that person or contractor, is not under suspension.

This bill would require an awarding department to give a prime contractor that fails to comply with the certification requirements described above reasonable opportunity to cure the failure. The bill would require the awarding department to provide notice of the failure to the Department of General Services, if after providing reasonable opportunity, the prime contractor continues to fail to comply with the certification requirements. The bill would require the Department of General Services, upon notification of the failure, to suspend the prime contractor from bidding on, or participating as either a contractor, subcontractor, or supplier in, any state contract or project for a period of not less than 5 years for a first violation, as specified. specified, except that the contractor would be required to meet all obligations of any existing contract to which it is a party. The bill would require the Department of General Services to permanently suspend the prime contractor from the program for a 2nd violation. violation, except that the contractor would be required to meet all obligations of any existing contract to which it is a party. The bill would subject a suspension issued under these provisions to the monitoring, listing, and verification requirements, and contracting prohibitions, described above.