SB 1174: Public contracts: Department of Transportation: bid preferences: employee stock ownership plans.

Existing law establishes the Department of Transportation and requires it to improve and maintain the state highways. Existing law authorizes the department to enter into any contracts required for the performance of its duties, as provided. Existing law establishes bid preferences in public contracting for certain types of bidders, including, but not limited to, small business and microbusiness bidders.

This bill would, on and after January 1, 2028, require the department to provide certain bid preferences to a contractor or subcontractor with an employee stock ownership plan (ESOP) that bids in which 30% or more is owned by the ESOP when the contractor or subcontractor bids or is part of a bid on a state-funded construction contract, as specified. The bill would make it unlawful for a person or contractor person, contractor, or subcontractor to engage in specified behaviors related to the fraudulent obtaining or retaining of an ESOP bid preference and would subject a person or contractor person, contractor, or subcontractor engaged in those behaviors to a suspension from bidding on or participating in any contract with the department for certain periods and specified civil penalties.