999. (a) This article shall be known as, and may be cited as, the
California Disabled Veteran Business Enterprise Program. The
California Disabled Veteran Business Enterprise Program is
established to address the special needs of disabled veterans seeking
rehabilitation and training through entrepreneurship and to
recognize the sacrifices of Californians disabled during military
service. It is the intent of the Legislature that every state
procurement authority honor California's disabled veterans by taking
all practical actions necessary to meet or exceed the disabled
veteran business enterprise participation goal of a minimum of 3
percent of total contract value.
(b) As used in this article, the following definitions apply:
(1) "Administering agency" means the Treasurer in the case of
contracts for professional bond services, and the Department of
General Services' Office of Small Business and Disabled Veteran
Business Enterprise Services, in the case of contracts governed by
Section 999.2.
(2) "Awarding department" means a state agency, department,
governmental entity, or other officer or entity empowered by law to
issue bonds or enter into contracts on behalf of the state.
(3) "Bonds" means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by, or on
behalf of, the state.
(4) "Contract" includes any agreement or joint agreement to
provide professional bond services to the State of California or an
awarding department. "Contract" also includes any agreement or joint
development agreement to provide labor, services, materials,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for, and on behalf of,
the state.
(5) (A) "Contractor" means any person or persons, regardless of
race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof that submits a bid and enters into a contract
with a representative of a state agency, department, governmental
entity, or other officer empowered by law to enter into contracts on
behalf of the state. "Contractor" includes any provider of
professional bond services who enters into a contract with an
awarding department.
(B) "Disabled veteran business enterprise contractor,
subcontractor, or supplier" means any person or entity that has been
certified by the administering agency pursuant to this article and
that performs a "commercially useful function," as defined below, in
providing services or goods that contribute to the fulfillment of the
contract requirements:
(i) A person or an entity is deemed to perform a "commercially
useful function" if a person or entity does all of the following:
(I) (aa) Is responsible for the execution of a distinct element of
the work of the contract.
(ab) Carries out the obligation by actually performing, managing,
or supervising the work involved.
(ac) Performs work that is normal for its business services and
functions.
(II) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.
(ii) A contractor, subcontractor, or supplier will not be
considered to perform a "commercially useful function" if the
contractor's, subcontractor's, or supplier's role is limited to that
of an extra participant in a transaction, contract, or project
through which funds are passed in order to obtain the appearance of a
disabled veteran business enterprise participation.
(6) "Disabled veteran" means a veteran of the military, naval, or
air service of the United States, including, but not limited to, the
Philippine Commonwealth Army, the Regular Scouts, "Old Scouts," and
the Special Philippine Scouts, "New Scouts," who has at least a
10-percent service-connected disability and who is domiciled in the
state.
(7) (A) "Disabled veteran business enterprise" means a business
certified by the administering agency as meeting all of the following
requirements:
(i) It is a sole proprietorship at least 51 percent owned by one
or more disabled veterans or, in the case of a publicly owned
business, at least 51 percent of its stock is unconditionally owned
by one or more disabled veterans; a subsidiary that is wholly owned
by a parent corporation, but only if at least 51 percent of the
voting stock of the parent corporation is unconditionally owned by
one or more disabled veterans; or a joint venture in which at least
51 percent of the joint venture's management, control, and earnings
are held by one or more disabled veterans.
(ii) The management and control of the daily business operations
are by one or more disabled veterans. The disabled veterans who
exercise management and control are not required to be the same
disabled veterans as the owners of the business.
(iii) It is a sole proprietorship, corporation, or partnership
with its home office located in the United States, which is not a
branch or subsidiary of a foreign corporation, foreign firm, or other
foreign-based business.
(B) Notwithstanding subparagraph (A), after the death or the
certification of a permanent medical disability of a disabled veteran
who is a majority owner of a business that qualified as a disabled
veteran business enterprise prior to that death or certification of a
permanent medical disability, and solely for purposes of any
contract entered into before that death or certification, that
business shall be deemed to be a disabled veteran business enterprise
for a period not to exceed three years after the date of that death
or certification of a permanent medical disability, if the business
is inherited or controlled by the spouse or child of that majority
owner, or by both of those persons.
(8) "Foreign corporation," "foreign firm," or "foreign-based
business" means a business entity that is incorporated or has its
principal headquarters located outside the United States of America.
(9) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to achieve.
(10) "Management and control" means effective and demonstrable
management of the business entity.
(11) "Professional bond services" include services as financial
advisers, bond counsel, underwriters in negotiated transactions,
underwriter's counsel, financial printers, feasibility consultants,
and other professional services related to the issuance and sale of
bonds.
999.1. (a) (1) Notwithstanding any other provision of law, each
awarding department shall have annual statewide participation goals
of not less than 3 percent for disabled veteran business enterprises
for contracts entered into by the awarding department during the year
for professional bond services. This section shall not apply if a
contract for professional bond services of an underwriter is to be
obtained by competitive bid. However, each awarding department shall
establish goals for contracts to be obtained by competitive bid for
professional bond services.
(2) These goals shall apply to the overall dollar amount expended
by the awarding department with respect to the contracts for
professional bond services relating to the issuance of bonds by the
awarding department, including amounts spent as underwriter's
discounts.
(b) In attempting to meet the goals set forth in subdivision (a),
the awarding department shall consider establishing cocounsel, joint
venture, and subcontracting relationships, including disabled veteran
business enterprises, in all contracts for professional bond
services. It shall be the responsibility of the head of each awarding
department to be supportive of the Treasurer's program for assigning
representative portions of professional bond services contracts for
purposes of meeting the goals established pursuant to this section.
However, nothing in this article shall preclude the awarding
department from achieving the goals set forth in this section without
requiring joint ventures, cocounsel, or subcontracting arrangements.
(c) This section shall not limit the ability of any awarding
department to meet a goal higher than those set forth in subdivision
(a) for the participation of disabled veteran business enterprises in
contracts awarded by the awarding department.
999.2. (a) Notwithstanding any other provision of law, contracts
awarded by any state agency, department, officer, or other state
governmental entity, including school districts when they are
expending state funds for construction, professional services (except
those subject to Chapter 6 (commencing with Section 16850) of Part 3
of Division 4 of Title 2 of the Government Code), materials,
supplies, equipment, alteration, repair, or improvement shall have
statewide participation goals of not less than 3 percent for disabled
veteran business enterprises. These goals apply to the overall
dollar amount expended each year by the awarding department.
(b) For purposes of this section:
(1) "Broker" or "agent" means any individual or entity, or any
combination thereof, that does not have title, possession, control,
and risk of loss of materials, supplies, services, or equipment
provided to an awarding department, unless one or more certified
disabled veterans has 51 percent ownership of the quantity and value
of the materials, supplies, services, and of each piece of equipment
provided under the contract.
(2) "Equipment" means any piece of equipment that is used or
provided for rental to any state agency, department, officer, or
other state governmental entity, including equipment for which
operators are provided.
(3) "Equipment broker" means any broker or agent who rents
equipment to an awarding department.
(c) A disabled veteran business enterprise that rents equipment to
an awarding department shall be deemed to be an equipment broker
unless one or more disabled veterans has 51-percent ownership of the
quantity and the value of each piece of equipment. If the equipment
is owned by one or more disabled veterans, each disabled veteran
owner shall, prior to performance under any contract, submit to the
awarding department a declaration signed by the disabled veteran
owner stating that the owner is a disabled veteran and providing the
name, address, telephone number, and tax identification number of the
disabled veteran owner. Each disabled veteran owner shall submit his
or her federal income tax returns to the administering agency
pursuant to subdivision (g) as if he or she were a disabled veteran
business enterprise. The disabled veteran business enterprise of a
disabled veteran owner who fails to submit his or her tax returns
will be deemed to be an equipment broker.
(d) A disabled veteran business enterprise that rents equipment to
an awarding department shall, prior to performing the contract,
submit to the awarding department a declaration signed by each
disabled veteran owner and manager of the enterprise stating that the
enterprise obtained the contract by representing that the enterprise
was a disabled veteran business enterprise meeting and maintaining
all of the requirements of a disabled veteran business enterprise.
The declaration shall include the name, address, telephone number,
and tax identification number of the owner of each piece of equipment
identified in the contract.
(e) State funds expended for equipment rented from equipment
brokers pursuant to contracts awarded under this section shall not be
credited toward the 3-percent goal.
(f) A disabled veteran business enterprise that is a broker or
agent and that obtains a contract pursuant to subdivision (a) shall,
prior to performing the contract, disclose to the awarding department
that the business is a broker or agent. The disclosure shall be made
in a declaration signed and executed by each disabled veteran owner
and manager of the enterprise, declaring that the enterprise is a
broker or agent, and identifying the name, address, and telephone
number of the principal for whom the enterprise is acting as a broker
or agent.
(g) (1) A disabled veteran business enterprise, and each owner
thereof, shall, at the time of certification, submit to the
administering agency complete copies of the enterprise's federal
income tax returns for the three previous tax years.
(2) A disabled veteran business enterprise, and each owner
thereof, shall submit to the administering agency complete copies of
the enterprise's federal income tax returns that have a
postcertification due date, on or before the due date, including
extensions.
(3) A disabled veteran business enterprise that, and each owner
thereof who, has not submitted to the administering agency complete
copies of the enterprise's federal income tax returns for the three
tax years preceding certification nor for each postcertification tax
year for which a return was required to be filed, shall have 90 days
to submit those returns.
(4) A disabled veteran business enterprise that fails to comply
with any provision of this subdivision shall be prohibited from
participating in any state contract until the disabled veteran
business enterprise complies with the provisions of this subdivision.
Funds expended involving a disabled veteran business enterprise
during any period in which that enterprise is not in compliance with
the provisions of this subdivision shall not be credited toward the
awarding department's 3-percent goal.
(h) A disabled veteran business enterprise that fails to maintain
the certification requirements set forth in this article shall
immediately notify the awarding department and the administering
agency of that failure by filing a notice of failure that states with
particularity each requirement the disabled veteran business
enterprise has failed to maintain.
999.3. Notwithstanding Section 999.1, if a contract for
professional bond services of an underwriter is to be obtained by
competitive bid, the awarding department shall, at a minimum, take
all of the following actions:
(a) Deliver the notice of sale or other notification of intention
to issue the bonds to all disabled veteran business enterprises that
have listed their names with the awarding department for the purpose
of this notice and other qualified disabled veteran enterprises known
to the awarding department.
(b) State in all notices of sale and other notifications of
intention to issue bonds that disabled veteran business enterprises
are encouraged to respond.
(c) Require all submitting bidders to certify their awareness of
the goals of the awarding department in accordance with this article.
999.5. (a) The administering agency for the California Disabled
Veteran Business Enterprise Program is the Department of General
Services, except in the case of contracts for professional bond
services. The Department of General Services shall consult with the
California Disabled Veteran Business Enterprise Program Advocate,
appointed by the Secretary of the Department of Veterans Affairs
pursuant to Section 999.11, on all matters relating to the California
Disabled Veteran Business Enterprise Program. The Director of
General Services shall adopt written policies and guidelines
establishing a uniform process for state contracting that would
provide a disabled veteran business enterprise participation
incentive to bidders. The incentive program shall be used by all
state agencies when awarding contracts.
(b) The Department of Veterans Affairs shall do all of the
following:
(1) Establish a method of monitoring adherence to the goals
specified in Sections 999.1 and 999.2.
(2) Promote the California Disabled Veteran Business Enterprise
Program to the fullest extent possible.
(3) Maintain complete records of its promotional efforts.
(4) Establish a system to track the effectiveness of its efforts
to promote the California Disabled Veteran Business Enterprise
Program, which shall include regular, periodic surveys of newly
certified disabled veteran business enterprises to determine how they
learned of the program, why they became certified, and what their
experience with awarding departments has been.
(c) An awarding department shall not credit toward the department'
s 3-percent goal state funds expended on a contract with a disabled
veteran business enterprise that does not meet and maintain the
certification requirements.
(d) Upon completion of an awarded contract for which a commitment
to achieve a disabled veteran business enterprise goal was made, an
awarding department shall require the prime contractor that entered
into a subcontract with a disabled veteran business enterprise to
certify to the awarding department all of the following:
(1) The total amount the prime contractor received under the
contract.
(2) The name and address of the disabled veteran business
enterprise that participated in the performance of the contract.
(3) The amount each disabled veteran business enterprise received
from the prime contractor.
(4) That all payments under the contract have been made to the
disabled veteran business enterprise. An awarding department shall
keep that certification on file. A person or entity that knowingly
provides false information shall be subject to a civil penalty for
each violation in the minimum amount of two thousand five hundred
dollars ($2,500) and the maximum amount of twenty-five thousand
dollars ($25,000). An action for a civil penalty under this
subdivision may be brought by any public prosecutor in the name of
the people of the State of California and the penalty imposed shall
be enforceable as a civil judgment.
(e) A prime contractor may, subject to the approval of the
Department of General Services, replace a disabled veteran business
enterprise identified by the prime contractor in its bid or offer,
pursuant to subdivision (a) of Section 999.10, with another disabled
veteran business enterprise.
(f) The administering agency shall adopt rules and regulations,
including standards for good faith efforts, for the purpose of
implementing this section. Emergency regulations consistent with this
section may be adopted.
999.6. In implementing this article, the awarding department shall
utilize existing resources such as the Office of Small Business and
Disabled Veteran Business Enterprise Services, the Department of
Veterans Affairs, the federal Department of Veterans Affairs, and the
Small Business Administration.
999.8. (a) Notwithstanding anything in this article to the
contrary, the validity or enforceability of any bonds, or any
contract or any notes, or other obligations issued by the awarding
department to provide for the payment of any contract subject to this
article shall not be affected in any way by the failure of an
awarding department to meet the goals established under this article.
(b) No action may be maintained to enjoin the issuance of any
bonds to which this article applies or the enforcement of any
contract for professional bond services based on an awarding
department's failure to meet the goals set forth in Section 999.1.
999.9. (a) It shall be unlawful for a person to:
(1) Knowingly and with intent to defraud, fraudulently obtain,
retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain,
certification as a disabled veteran business enterprise for the
purpose of this article.
(2) Willfully and knowingly make a false statement with the intent
to defraud, whether by affidavit, report, or other representation,
to a state official or employee for the purpose of influencing the
certification or denial of certification of any entity as a disabled
veteran business enterprise.
(3) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a business entity that has
requested certification as a disabled veteran business enterprise.
(4) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person in fraudulently obtaining or
attempting to obtain, public moneys, contracts, or funds expended
under a contract, that are awarded by any state agency, department,
officer, or other state governmental agency, to which the person is
not entitled under this article.
(5) 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.
(6) Knowingly and with intent to defraud, fraudulently represent
that a commercially useful function is being performed by a disabled
veteran business enterprise in order to obtain or retain a bid
preference or a state contract.
(7) Willfully and knowingly make or subscribe to any statement,
declaration, or other document that is fraudulent or false as to any
material matter, whether or not that falsity or fraud is committed
with the knowledge or consent of the person authorized or required to
present the declaration, statement, or document.
(8) Willfully and knowingly aid or assist in, or procure, counsel,
or advise, the preparation or presentation of a declaration,
statement, or other document that is fraudulent or false as to any
material matter, regardless of whether that falsity or fraud is
committed with the knowledge or consent of the person authorized or
required to present the declaration, statement, or document.
(9) Willfully and knowingly fail to file any declaration or notice
with the awarding agency that is required by Section 999.2.
(10) Establish, or knowingly aid in the establishment of, or
exercise control over, a firm found to have violated any of
paragraphs (1) to (9), inclusive.
(b) Any person who violates any of the provisions of subdivision
(a) shall be guilty of a misdemeanor punishable by imprisonment in
the county jail not exceeding six months or by a fine not exceeding
one thousand dollars ($1,000), or by both. In addition, the person
shall be liable for a civil penalty of not less than ten thousand
dollars ($10,000) nor more than thirty thousand dollars ($30,000) for
the first violation, and a civil penalty of not less than thirty
thousand dollars ($30,000) nor more than fifty thousand dollars
($50,000) for each additional or subsequent violation. A defendant
who violates any of the provisions of subdivision (a) shall pay all
costs and attorney's fees incurred by the plaintiff in a civil action
brought pursuant to this section, including costs incurred by the
awarding department or the Department of General Services.
(c) (1) The Department of General Services shall suspend any
person who violates subdivision (a) 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 three years and not
more than 10 years, and if certified as a disabled veteran business
enterprise, the department shall revoke the business's certification,
and the small business or microbusiness enterprise certification if
the business has both certifications, for a period of not less than
five years. An additional or subsequent violation shall extend the
periods of suspension and revocation for a period of not less than 10
years. The suspension and revocation of certification shall apply to
the principals of the business and any subsequent business formed or
financed by, or affiliated with, one or more of those principals.
(2) A person that violates any of the provisions of subdivision
(a) shall pay all costs incurred by the awarding department and the
Department of General Services for any investigations that led to the
finding of the violation. Costs incurred shall include, but are not
limited to, costs and attorney's fees paid by the department or the
Department of General Services related to hearings and court
appearances.
(3) The Department of General Services shall prohibit any business
or person who fails to satisfy any of the penalties, costs, and
attorney's fees imposed pursuant to subdivisions (b) and (c) from
further contracting with the state until all of the penalties, costs,
and attorney's fees are satisfied.
(d) In addition to the penalties imposed by this section, if a
contractor is found to be in violation of paragraph (6) of
subdivision (a), any existing contract between that contractor and
any awarding department may be terminated at the discretion of the
awarding department, and, where payment to the contractor is made
directly by the state agency, the agency shall set off penalties and
costs due to the state against any payments due to that contractor.
In the event that the contracting state agency has forwarded the
contract and invoices to the Controller for payment, the state agency
shall reduce the amount due to the contractor as reflected in the
claim schedule submitted to the Controller by the amount of the
penalties and costs due the state. In addition, with regard to any
penalties and costs due to the state that the state agency has not
accounted for by either a set off against payments due to the
contractor or a reduction reflected in the claim schedule submitted
to the Controller, to the extent that the Controller is making
payments to the contractor on behalf of any state agency, the
Controller shall set off penalties and costs due against any invoices
due to the contractor from any other contract awarded to the
contractor.
(e) The awarding department shall report all alleged violations of
this section to the Department of General Services. After any review
and investigation it deems necessary, the Department of General
Services shall subsequently report all allegations which have
sufficient grounds to the Attorney General who shall determine
whether to bring a civil action against any person or firm for a
violation of this section. However, the Department of General
Services may pursue administrative action and administrative
penalties irrespective of whether the Attorney General chooses to
bring a civil action.
(f) The Department of General Services shall monitor the status of
all reported violations and shall 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.
(g) No awarding department shall enter into any contract with any
person suspended for violating this section during the period of the
person's suspension. No awarding department shall award a contract to
any contractor utilizing the services of any person as a
subcontractor suspended for violating this section during the period
of the person's suspension.
(h) The awarding department shall 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 for violating this section.
999.10. (a) Any awarding department taking bids in connection with
the award of any contract shall provide, in the general conditions
under which bids will be received, that any person making a bid or
offer to perform a contract shall, in his or her bid or offer, set
forth the following information:
(1) The name and the location of the place of business of each
subcontractor certified as a disabled veteran business enterprise who
will perform work or labor or render service to the prime contractor
in connection with the performance of the contract and who will be
used by the prime contractor to fulfill disabled veteran business
enterprise participation goals.
(2) The portion of work that will be done by each subcontractor
under paragraph (1). Except in cases of emergency where a contract is
necessary for the immediate preservation of the public health,
welfare, or safety, or protection of state property, the prime
contractor shall list only one subcontractor for each portion of work
as is defined by the prime contractor in his or her bid or offer.
(b) The Subletting and Subcontracting Fair Practices Act (Chapter
4 (commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code) shall apply to the information required by
subdivision (a) relating to subcontractors certified as disabled
veteran business enterprises.
(c) For purposes of this section, "subcontractor" and "prime
contractor" shall have the same meaning as those terms are defined in
Section 4113 of the Public Contract Code.
(d) As used in this section, "contract" does not include a
contract negotiated pursuant to Chapter 10 (commencing with Section
4525) of Division 5 of Title 1 of the Government Code.
999.11. The Secretary of the Department of Veterans Affairs shall
appoint the California Disabled Veteran Business Enterprise Program
Advocate. The California Disabled Veteran Business Enterprise Program
Advocate shall report directly to the secretary and shall do all of
the following:
(a) Oversee, promote, and coordinate efforts to facilitate
implementation of this article.
(b) Disseminate information on this article.
(c) Coordinate reports pursuant to Section 999.7.
(d) Coordinate with administering agencies and existing and
potential disabled veteran business enterprises to achieve the goals
specified in Sections 999.1 and 999.2.
(e) Coordinate with the California Disabled Veteran Business
Enterprise Program Advocate appointed in all awarding departments
pursuant to Section 999.12.
999.12. Each awarding department shall appoint an agency Disabled
Veteran Business Enterprise Program Advocate. This person shall be
the same individual appointed pursuant to Section 14846 of the
Government Code. The agency Disabled Veteran Business Enterprise
Program Advocate shall do all of the following:
(a) Assist certified disabled veteran business enterprises in
participating in that agency's contracting process.
(b) Assist contract officers in seeking disabled veteran business
enterprises to participate in the agency's contract and procurement
activities by performing outreach efforts to recruit disabled veteran
business enterprises to offer their services as either a prime
contractor or subcontractor on any contract proposed by the awarding
department that requires disabled veteran business enterprise
participation, and by other feasible means.
(c) Meet regularly with the California Disabled Veteran Business
Enterprise Program Advocate and contract and procurement staffs of
their departments to disseminate information about the California
Disabled Veteran Business Enterprise Program.
(d) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency's contractors or
subcontractors.
(e) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.
(f) Coordinate and meet, on a regular basis, with the California
Disabled Veteran Business Enterprise Program Advocate at the
Department of Veterans Affairs in an effort to meet the statewide
3-percent goal provided for in Section 999.2.
999.13. This article includes language similar to that contained in
Article 1.5 (commencing with Section 10115) of Chapter 1 of Part 2
of Division 2 of the Public Contract Code and does not create an
independent or additional goal or program.
999. (a) This article shall be known as, and may be cited as, the
California Disabled Veteran Business Enterprise Program. The
California Disabled Veteran Business Enterprise Program is
established to address the special needs of disabled veterans seeking
rehabilitation and training through entrepreneurship and to
recognize the sacrifices of Californians disabled during military
service. It is the intent of the Legislature that every state
procurement authority honor California's disabled veterans by taking
all practical actions necessary to meet or exceed the disabled
veteran business enterprise participation goal of a minimum of 3
percent of total contract value.
(b) As used in this article, the following definitions apply:
(1) "Administering agency" means the Treasurer in the case of
contracts for professional bond services, and the Department of
General Services' Office of Small Business and Disabled Veteran
Business Enterprise Services, in the case of contracts governed by
Section 999.2.
(2) "Awarding department" means a state agency, department,
governmental entity, or other officer or entity empowered by law to
issue bonds or enter into contracts on behalf of the state.
(3) "Bonds" means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by, or on
behalf of, the state.
(4) "Contract" includes any agreement or joint agreement to
provide professional bond services to the State of California or an
awarding department. "Contract" also includes any agreement or joint
development agreement to provide labor, services, materials,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for, and on behalf of,
the state.
(5) (A) "Contractor" means any person or persons, regardless of
race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof that submits a bid and enters into a contract
with a representative of a state agency, department, governmental
entity, or other officer empowered by law to enter into contracts on
behalf of the state. "Contractor" includes any provider of
professional bond services who enters into a contract with an
awarding department.
(B) "Disabled veteran business enterprise contractor,
subcontractor, or supplier" means any person or entity that has been
certified by the administering agency pursuant to this article and
that performs a "commercially useful function," as defined below, in
providing services or goods that contribute to the fulfillment of the
contract requirements:
(i) A person or an entity is deemed to perform a "commercially
useful function" if a person or entity does all of the following:
(I) (aa) Is responsible for the execution of a distinct element of
the work of the contract.
(ab) Carries out the obligation by actually performing, managing,
or supervising the work involved.
(ac) Performs work that is normal for its business services and
functions.
(II) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.
(ii) A contractor, subcontractor, or supplier will not be
considered to perform a "commercially useful function" if the
contractor's, subcontractor's, or supplier's role is limited to that
of an extra participant in a transaction, contract, or project
through which funds are passed in order to obtain the appearance of a
disabled veteran business enterprise participation.
(6) "Disabled veteran" means a veteran of the military, naval, or
air service of the United States, including, but not limited to, the
Philippine Commonwealth Army, the Regular Scouts, "Old Scouts," and
the Special Philippine Scouts, "New Scouts," who has at least a
10-percent service-connected disability and who is domiciled in the
state.
(7) (A) "Disabled veteran business enterprise" means a business
certified by the administering agency as meeting all of the following
requirements:
(i) It is a sole proprietorship at least 51 percent owned by one
or more disabled veterans or, in the case of a publicly owned
business, at least 51 percent of its stock is unconditionally owned
by one or more disabled veterans; a subsidiary that is wholly owned
by a parent corporation, but only if at least 51 percent of the
voting stock of the parent corporation is unconditionally owned by
one or more disabled veterans; or a joint venture in which at least
51 percent of the joint venture's management, control, and earnings
are held by one or more disabled veterans.
(ii) The management and control of the daily business operations
are by one or more disabled veterans. The disabled veterans who
exercise management and control are not required to be the same
disabled veterans as the owners of the business.
(iii) It is a sole proprietorship, corporation, or partnership
with its home office located in the United States, which is not a
branch or subsidiary of a foreign corporation, foreign firm, or other
foreign-based business.
(B) Notwithstanding subparagraph (A), after the death or the
certification of a permanent medical disability of a disabled veteran
who is a majority owner of a business that qualified as a disabled
veteran business enterprise prior to that death or certification of a
permanent medical disability, and solely for purposes of any
contract entered into before that death or certification, that
business shall be deemed to be a disabled veteran business enterprise
for a period not to exceed three years after the date of that death
or certification of a permanent medical disability, if the business
is inherited or controlled by the spouse or child of that majority
owner, or by both of those persons.
(8) "Foreign corporation," "foreign firm," or "foreign-based
business" means a business entity that is incorporated or has its
principal headquarters located outside the United States of America.
(9) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to achieve.
(10) "Management and control" means effective and demonstrable
management of the business entity.
(11) "Professional bond services" include services as financial
advisers, bond counsel, underwriters in negotiated transactions,
underwriter's counsel, financial printers, feasibility consultants,
and other professional services related to the issuance and sale of
bonds.
999.1. (a) (1) Notwithstanding any other provision of law, each
awarding department shall have annual statewide participation goals
of not less than 3 percent for disabled veteran business enterprises
for contracts entered into by the awarding department during the year
for professional bond services. This section shall not apply if a
contract for professional bond services of an underwriter is to be
obtained by competitive bid. However, each awarding department shall
establish goals for contracts to be obtained by competitive bid for
professional bond services.
(2) These goals shall apply to the overall dollar amount expended
by the awarding department with respect to the contracts for
professional bond services relating to the issuance of bonds by the
awarding department, including amounts spent as underwriter's
discounts.
(b) In attempting to meet the goals set forth in subdivision (a),
the awarding department shall consider establishing cocounsel, joint
venture, and subcontracting relationships, including disabled veteran
business enterprises, in all contracts for professional bond
services. It shall be the responsibility of the head of each awarding
department to be supportive of the Treasurer's program for assigning
representative portions of professional bond services contracts for
purposes of meeting the goals established pursuant to this section.
However, nothing in this article shall preclude the awarding
department from achieving the goals set forth in this section without
requiring joint ventures, cocounsel, or subcontracting arrangements.
(c) This section shall not limit the ability of any awarding
department to meet a goal higher than those set forth in subdivision
(a) for the participation of disabled veteran business enterprises in
contracts awarded by the awarding department.
999.2. (a) Notwithstanding any other provision of law, contracts
awarded by any state agency, department, officer, or other state
governmental entity, including school districts when they are
expending state funds for construction, professional services (except
those subject to Chapter 6 (commencing with Section 16850) of Part 3
of Division 4 of Title 2 of the Government Code), materials,
supplies, equipment, alteration, repair, or improvement shall have
statewide participation goals of not less than 3 percent for disabled
veteran business enterprises. These goals apply to the overall
dollar amount expended each year by the awarding department.
(b) For purposes of this section:
(1) "Broker" or "agent" means any individual or entity, or any
combination thereof, that does not have title, possession, control,
and risk of loss of materials, supplies, services, or equipment
provided to an awarding department, unless one or more certified
disabled veterans has 51 percent ownership of the quantity and value
of the materials, supplies, services, and of each piece of equipment
provided under the contract.
(2) "Equipment" means any piece of equipment that is used or
provided for rental to any state agency, department, officer, or
other state governmental entity, including equipment for which
operators are provided.
(3) "Equipment broker" means any broker or agent who rents
equipment to an awarding department.
(c) A disabled veteran business enterprise that rents equipment to
an awarding department shall be deemed to be an equipment broker
unless one or more disabled veterans has 51-percent ownership of the
quantity and the value of each piece of equipment. If the equipment
is owned by one or more disabled veterans, each disabled veteran
owner shall, prior to performance under any contract, submit to the
awarding department a declaration signed by the disabled veteran
owner stating that the owner is a disabled veteran and providing the
name, address, telephone number, and tax identification number of the
disabled veteran owner. Each disabled veteran owner shall submit his
or her federal income tax returns to the administering agency
pursuant to subdivision (g) as if he or she were a disabled veteran
business enterprise. The disabled veteran business enterprise of a
disabled veteran owner who fails to submit his or her tax returns
will be deemed to be an equipment broker.
(d) A disabled veteran business enterprise that rents equipment to
an awarding department shall, prior to performing the contract,
submit to the awarding department a declaration signed by each
disabled veteran owner and manager of the enterprise stating that the
enterprise obtained the contract by representing that the enterprise
was a disabled veteran business enterprise meeting and maintaining
all of the requirements of a disabled veteran business enterprise.
The declaration shall include the name, address, telephone number,
and tax identification number of the owner of each piece of equipment
identified in the contract.
(e) State funds expended for equipment rented from equipment
brokers pursuant to contracts awarded under this section shall not be
credited toward the 3-percent goal.
(f) A disabled veteran business enterprise that is a broker or
agent and that obtains a contract pursuant to subdivision (a) shall,
prior to performing the contract, disclose to the awarding department
that the business is a broker or agent. The disclosure shall be made
in a declaration signed and executed by each disabled veteran owner
and manager of the enterprise, declaring that the enterprise is a
broker or agent, and identifying the name, address, and telephone
number of the principal for whom the enterprise is acting as a broker
or agent.
(g) (1) A disabled veteran business enterprise, and each owner
thereof, shall, at the time of certification, submit to the
administering agency complete copies of the enterprise's federal
income tax returns for the three previous tax years.
(2) A disabled veteran business enterprise, and each owner
thereof, shall submit to the administering agency complete copies of
the enterprise's federal income tax returns that have a
postcertification due date, on or before the due date, including
extensions.
(3) A disabled veteran business enterprise that, and each owner
thereof who, has not submitted to the administering agency complete
copies of the enterprise's federal income tax returns for the three
tax years preceding certification nor for each postcertification tax
year for which a return was required to be filed, shall have 90 days
to submit those returns.
(4) A disabled veteran business enterprise that fails to comply
with any provision of this subdivision shall be prohibited from
participating in any state contract until the disabled veteran
business enterprise complies with the provisions of this subdivision.
Funds expended involving a disabled veteran business enterprise
during any period in which that enterprise is not in compliance with
the provisions of this subdivision shall not be credited toward the
awarding department's 3-percent goal.
(h) A disabled veteran business enterprise that fails to maintain
the certification requirements set forth in this article shall
immediately notify the awarding department and the administering
agency of that failure by filing a notice of failure that states with
particularity each requirement the disabled veteran business
enterprise has failed to maintain.
999.3. Notwithstanding Section 999.1, if a contract for
professional bond services of an underwriter is to be obtained by
competitive bid, the awarding department shall, at a minimum, take
all of the following actions:
(a) Deliver the notice of sale or other notification of intention
to issue the bonds to all disabled veteran business enterprises that
have listed their names with the awarding department for the purpose
of this notice and other qualified disabled veteran enterprises known
to the awarding department.
(b) State in all notices of sale and other notifications of
intention to issue bonds that disabled veteran business enterprises
are encouraged to respond.
(c) Require all submitting bidders to certify their awareness of
the goals of the awarding department in accordance with this article.
999.5. (a) The administering agency for the California Disabled
Veteran Business Enterprise Program is the Department of General
Services, except in the case of contracts for professional bond
services. The Department of General Services shall consult with the
California Disabled Veteran Business Enterprise Program Advocate,
appointed by the Secretary of the Department of Veterans Affairs
pursuant to Section 999.11, on all matters relating to the California
Disabled Veteran Business Enterprise Program. The Director of
General Services shall adopt written policies and guidelines
establishing a uniform process for state contracting that would
provide a disabled veteran business enterprise participation
incentive to bidders. The incentive program shall be used by all
state agencies when awarding contracts.
(b) The Department of Veterans Affairs shall do all of the
following:
(1) Establish a method of monitoring adherence to the goals
specified in Sections 999.1 and 999.2.
(2) Promote the California Disabled Veteran Business Enterprise
Program to the fullest extent possible.
(3) Maintain complete records of its promotional efforts.
(4) Establish a system to track the effectiveness of its efforts
to promote the California Disabled Veteran Business Enterprise
Program, which shall include regular, periodic surveys of newly
certified disabled veteran business enterprises to determine how they
learned of the program, why they became certified, and what their
experience with awarding departments has been.
(c) An awarding department shall not credit toward the department'
s 3-percent goal state funds expended on a contract with a disabled
veteran business enterprise that does not meet and maintain the
certification requirements.
(d) Upon completion of an awarded contract for which a commitment
to achieve a disabled veteran business enterprise goal was made, an
awarding department shall require the prime contractor that entered
into a subcontract with a disabled veteran business enterprise to
certify to the awarding department all of the following:
(1) The total amount the prime contractor received under the
contract.
(2) The name and address of the disabled veteran business
enterprise that participated in the performance of the contract.
(3) The amount each disabled veteran business enterprise received
from the prime contractor.
(4) That all payments under the contract have been made to the
disabled veteran business enterprise. An awarding department shall
keep that certification on file. A person or entity that knowingly
provides false information shall be subject to a civil penalty for
each violation in the minimum amount of two thousand five hundred
dollars ($2,500) and the maximum amount of twenty-five thousand
dollars ($25,000). An action for a civil penalty under this
subdivision may be brought by any public prosecutor in the name of
the people of the State of California and the penalty imposed shall
be enforceable as a civil judgment.
(e) A prime contractor may, subject to the approval of the
Department of General Services, replace a disabled veteran business
enterprise identified by the prime contractor in its bid or offer,
pursuant to subdivision (a) of Section 999.10, with another disabled
veteran business enterprise.
(f) The administering agency shall adopt rules and regulations,
including standards for good faith efforts, for the purpose of
implementing this section. Emergency regulations consistent with this
section may be adopted.
999.6. In implementing this article, the awarding department shall
utilize existing resources such as the Office of Small Business and
Disabled Veteran Business Enterprise Services, the Department of
Veterans Affairs, the federal Department of Veterans Affairs, and the
Small Business Administration.
999.8. (a) Notwithstanding anything in this article to the
contrary, the validity or enforceability of any bonds, or any
contract or any notes, or other obligations issued by the awarding
department to provide for the payment of any contract subject to this
article shall not be affected in any way by the failure of an
awarding department to meet the goals established under this article.
(b) No action may be maintained to enjoin the issuance of any
bonds to which this article applies or the enforcement of any
contract for professional bond services based on an awarding
department's failure to meet the goals set forth in Section 999.1.
999.9. (a) It shall be unlawful for a person to:
(1) Knowingly and with intent to defraud, fraudulently obtain,
retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain,
certification as a disabled veteran business enterprise for the
purpose of this article.
(2) Willfully and knowingly make a false statement with the intent
to defraud, whether by affidavit, report, or other representation,
to a state official or employee for the purpose of influencing the
certification or denial of certification of any entity as a disabled
veteran business enterprise.
(3) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a business entity that has
requested certification as a disabled veteran business enterprise.
(4) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person in fraudulently obtaining or
attempting to obtain, public moneys, contracts, or funds expended
under a contract, that are awarded by any state agency, department,
officer, or other state governmental agency, to which the person is
not entitled under this article.
(5) 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.
(6) Knowingly and with intent to defraud, fraudulently represent
that a commercially useful function is being performed by a disabled
veteran business enterprise in order to obtain or retain a bid
preference or a state contract.
(7) Willfully and knowingly make or subscribe to any statement,
declaration, or other document that is fraudulent or false as to any
material matter, whether or not that falsity or fraud is committed
with the knowledge or consent of the person authorized or required to
present the declaration, statement, or document.
(8) Willfully and knowingly aid or assist in, or procure, counsel,
or advise, the preparation or presentation of a declaration,
statement, or other document that is fraudulent or false as to any
material matter, regardless of whether that falsity or fraud is
committed with the knowledge or consent of the person authorized or
required to present the declaration, statement, or document.
(9) Willfully and knowingly fail to file any declaration or notice
with the awarding agency that is required by Section 999.2.
(10) Establish, or knowingly aid in the establishment of, or
exercise control over, a firm found to have violated any of
paragraphs (1) to (9), inclusive.
(b) Any person who violates any of the provisions of subdivision
(a) shall be guilty of a misdemeanor punishable by imprisonment in
the county jail not exceeding six months or by a fine not exceeding
one thousand dollars ($1,000), or by both. In addition, the person
shall be liable for a civil penalty of not less than ten thousand
dollars ($10,000) nor more than thirty thousand dollars ($30,000) for
the first violation, and a civil penalty of not less than thirty
thousand dollars ($30,000) nor more than fifty thousand dollars
($50,000) for each additional or subsequent violation. A defendant
who violates any of the provisions of subdivision (a) shall pay all
costs and attorney's fees incurred by the plaintiff in a civil action
brought pursuant to this section, including costs incurred by the
awarding department or the Department of General Services.
(c) (1) The Department of General Services shall suspend any
person who violates subdivision (a) 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 three years and not
more than 10 years, and if certified as a disabled veteran business
enterprise, the department shall revoke the business's certification,
and the small business or microbusiness enterprise certification if
the business has both certifications, for a period of not less than
five years. An additional or subsequent violation shall extend the
periods of suspension and revocation for a period of not less than 10
years. The suspension and revocation of certification shall apply to
the principals of the business and any subsequent business formed or
financed by, or affiliated with, one or more of those principals.
(2) A person that violates any of the provisions of subdivision
(a) shall pay all costs incurred by the awarding department and the
Department of General Services for any investigations that led to the
finding of the violation. Costs incurred shall include, but are not
limited to, costs and attorney's fees paid by the department or the
Department of General Services related to hearings and court
appearances.
(3) The Department of General Services shall prohibit any business
or person who fails to satisfy any of the penalties, costs, and
attorney's fees imposed pursuant to subdivisions (b) and (c) from
further contracting with the state until all of the penalties, costs,
and attorney's fees are satisfied.
(d) In addition to the penalties imposed by this section, if a
contractor is found to be in violation of paragraph (6) of
subdivision (a), any existing contract between that contractor and
any awarding department may be terminated at the discretion of the
awarding department, and, where payment to the contractor is made
directly by the state agency, the agency shall set off penalties and
costs due to the state against any payments due to that contractor.
In the event that the contracting state agency has forwarded the
contract and invoices to the Controller for payment, the state agency
shall reduce the amount due to the contractor as reflected in the
claim schedule submitted to the Controller by the amount of the
penalties and costs due the state. In addition, with regard to any
penalties and costs due to the state that the state agency has not
accounted for by either a set off against payments due to the
contractor or a reduction reflected in the claim schedule submitted
to the Controller, to the extent that the Controller is making
payments to the contractor on behalf of any state agency, the
Controller shall set off penalties and costs due against any invoices
due to the contractor from any other contract awarded to the
contractor.
(e) The awarding department shall report all alleged violations of
this section to the Department of General Services. After any review
and investigation it deems necessary, the Department of General
Services shall subsequently report all allegations which have
sufficient grounds to the Attorney General who shall determine
whether to bring a civil action against any person or firm for a
violation of this section. However, the Department of General
Services may pursue administrative action and administrative
penalties irrespective of whether the Attorney General chooses to
bring a civil action.
(f) The Department of General Services shall monitor the status of
all reported violations and shall 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.
(g) No awarding department shall enter into any contract with any
person suspended for violating this section during the period of the
person's suspension. No awarding department shall award a contract to
any contractor utilizing the services of any person as a
subcontractor suspended for violating this section during the period
of the person's suspension.
(h) The awarding department shall 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 for violating this section.
999.10. (a) Any awarding department taking bids in connection with
the award of any contract shall provide, in the general conditions
under which bids will be received, that any person making a bid or
offer to perform a contract shall, in his or her bid or offer, set
forth the following information:
(1) The name and the location of the place of business of each
subcontractor certified as a disabled veteran business enterprise who
will perform work or labor or render service to the prime contractor
in connection with the performance of the contract and who will be
used by the prime contractor to fulfill disabled veteran business
enterprise participation goals.
(2) The portion of work that will be done by each subcontractor
under paragraph (1). Except in cases of emergency where a contract is
necessary for the immediate preservation of the public health,
welfare, or safety, or protection of state property, the prime
contractor shall list only one subcontractor for each portion of work
as is defined by the prime contractor in his or her bid or offer.
(b) The Subletting and Subcontracting Fair Practices Act (Chapter
4 (commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code) shall apply to the information required by
subdivision (a) relating to subcontractors certified as disabled
veteran business enterprises.
(c) For purposes of this section, "subcontractor" and "prime
contractor" shall have the same meaning as those terms are defined in
Section 4113 of the Public Contract Code.
(d) As used in this section, "contract" does not include a
contract negotiated pursuant to Chapter 10 (commencing with Section
4525) of Division 5 of Title 1 of the Government Code.
999.11. The Secretary of the Department of Veterans Affairs shall
appoint the California Disabled Veteran Business Enterprise Program
Advocate. The California Disabled Veteran Business Enterprise Program
Advocate shall report directly to the secretary and shall do all of
the following:
(a) Oversee, promote, and coordinate efforts to facilitate
implementation of this article.
(b) Disseminate information on this article.
(c) Coordinate reports pursuant to Section 999.7.
(d) Coordinate with administering agencies and existing and
potential disabled veteran business enterprises to achieve the goals
specified in Sections 999.1 and 999.2.
(e) Coordinate with the California Disabled Veteran Business
Enterprise Program Advocate appointed in all awarding departments
pursuant to Section 999.12.
999.12. Each awarding department shall appoint an agency Disabled
Veteran Business Enterprise Program Advocate. This person shall be
the same individual appointed pursuant to Section 14846 of the
Government Code. The agency Disabled Veteran Business Enterprise
Program Advocate shall do all of the following:
(a) Assist certified disabled veteran business enterprises in
participating in that agency's contracting process.
(b) Assist contract officers in seeking disabled veteran business
enterprises to participate in the agency's contract and procurement
activities by performing outreach efforts to recruit disabled veteran
business enterprises to offer their services as either a prime
contractor or subcontractor on any contract proposed by the awarding
department that requires disabled veteran business enterprise
participation, and by other feasible means.
(c) Meet regularly with the California Disabled Veteran Business
Enterprise Program Advocate and contract and procurement staffs of
their departments to disseminate information about the California
Disabled Veteran Business Enterprise Program.
(d) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency's contractors or
subcontractors.
(e) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.
(f) Coordinate and meet, on a regular basis, with the California
Disabled Veteran Business Enterprise Program Advocate at the
Department of Veterans Affairs in an effort to meet the statewide
3-percent goal provided for in Section 999.2.
999.13. This article includes language similar to that contained in
Article 1.5 (commencing with Section 10115) of Chapter 1 of Part 2
of Division 2 of the Public Contract Code and does not create an
independent or additional goal or program.
999. (a) This article shall be known as, and may be cited as, the
California Disabled Veteran Business Enterprise Program. The
California Disabled Veteran Business Enterprise Program is
established to address the special needs of disabled veterans seeking
rehabilitation and training through entrepreneurship and to
recognize the sacrifices of Californians disabled during military
service. It is the intent of the Legislature that every state
procurement authority honor California's disabled veterans by taking
all practical actions necessary to meet or exceed the disabled
veteran business enterprise participation goal of a minimum of 3
percent of total contract value.
(b) As used in this article, the following definitions apply:
(1) "Administering agency" means the Treasurer in the case of
contracts for professional bond services, and the Department of
General Services' Office of Small Business and Disabled Veteran
Business Enterprise Services, in the case of contracts governed by
Section 999.2.
(2) "Awarding department" means a state agency, department,
governmental entity, or other officer or entity empowered by law to
issue bonds or enter into contracts on behalf of the state.
(3) "Bonds" means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by, or on
behalf of, the state.
(4) "Contract" includes any agreement or joint agreement to
provide professional bond services to the State of California or an
awarding department. "Contract" also includes any agreement or joint
development agreement to provide labor, services, materials,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for, and on behalf of,
the state.
(5) (A) "Contractor" means any person or persons, regardless of
race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof that submits a bid and enters into a contract
with a representative of a state agency, department, governmental
entity, or other officer empowered by law to enter into contracts on
behalf of the state. "Contractor" includes any provider of
professional bond services who enters into a contract with an
awarding department.
(B) "Disabled veteran business enterprise contractor,
subcontractor, or supplier" means any person or entity that has been
certified by the administering agency pursuant to this article and
that performs a "commercially useful function," as defined below, in
providing services or goods that contribute to the fulfillment of the
contract requirements:
(i) A person or an entity is deemed to perform a "commercially
useful function" if a person or entity does all of the following:
(I) (aa) Is responsible for the execution of a distinct element of
the work of the contract.
(ab) Carries out the obligation by actually performing, managing,
or supervising the work involved.
(ac) Performs work that is normal for its business services and
functions.
(II) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.
(ii) A contractor, subcontractor, or supplier will not be
considered to perform a "commercially useful function" if the
contractor's, subcontractor's, or supplier's role is limited to that
of an extra participant in a transaction, contract, or project
through which funds are passed in order to obtain the appearance of a
disabled veteran business enterprise participation.
(6) "Disabled veteran" means a veteran of the military, naval, or
air service of the United States, including, but not limited to, the
Philippine Commonwealth Army, the Regular Scouts, "Old Scouts," and
the Special Philippine Scouts, "New Scouts," who has at least a
10-percent service-connected disability and who is domiciled in the
state.
(7) (A) "Disabled veteran business enterprise" means a business
certified by the administering agency as meeting all of the following
requirements:
(i) It is a sole proprietorship at least 51 percent owned by one
or more disabled veterans or, in the case of a publicly owned
business, at least 51 percent of its stock is unconditionally owned
by one or more disabled veterans; a subsidiary that is wholly owned
by a parent corporation, but only if at least 51 percent of the
voting stock of the parent corporation is unconditionally owned by
one or more disabled veterans; or a joint venture in which at least
51 percent of the joint venture's management, control, and earnings
are held by one or more disabled veterans.
(ii) The management and control of the daily business operations
are by one or more disabled veterans. The disabled veterans who
exercise management and control are not required to be the same
disabled veterans as the owners of the business.
(iii) It is a sole proprietorship, corporation, or partnership
with its home office located in the United States, which is not a
branch or subsidiary of a foreign corporation, foreign firm, or other
foreign-based business.
(B) Notwithstanding subparagraph (A), after the death or the
certification of a permanent medical disability of a disabled veteran
who is a majority owner of a business that qualified as a disabled
veteran business enterprise prior to that death or certification of a
permanent medical disability, and solely for purposes of any
contract entered into before that death or certification, that
business shall be deemed to be a disabled veteran business enterprise
for a period not to exceed three years after the date of that death
or certification of a permanent medical disability, if the business
is inherited or controlled by the spouse or child of that majority
owner, or by both of those persons.
(8) "Foreign corporation," "foreign firm," or "foreign-based
business" means a business entity that is incorporated or has its
principal headquarters located outside the United States of America.
(9) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to achieve.
(10) "Management and control" means effective and demonstrable
management of the business entity.
(11) "Professional bond services" include services as financial
advisers, bond counsel, underwriters in negotiated transactions,
underwriter's counsel, financial printers, feasibility consultants,
and other professional services related to the issuance and sale of
bonds.
999.1. (a) (1) Notwithstanding any other provision of law, each
awarding department shall have annual statewide participation goals
of not less than 3 percent for disabled veteran business enterprises
for contracts entered into by the awarding department during the year
for professional bond services. This section shall not apply if a
contract for professional bond services of an underwriter is to be
obtained by competitive bid. However, each awarding department shall
establish goals for contracts to be obtained by competitive bid for
professional bond services.
(2) These goals shall apply to the overall dollar amount expended
by the awarding department with respect to the contracts for
professional bond services relating to the issuance of bonds by the
awarding department, including amounts spent as underwriter's
discounts.
(b) In attempting to meet the goals set forth in subdivision (a),
the awarding department shall consider establishing cocounsel, joint
venture, and subcontracting relationships, including disabled veteran
business enterprises, in all contracts for professional bond
services. It shall be the responsibility of the head of each awarding
department to be supportive of the Treasurer's program for assigning
representative portions of professional bond services contracts for
purposes of meeting the goals established pursuant to this section.
However, nothing in this article shall preclude the awarding
department from achieving the goals set forth in this section without
requiring joint ventures, cocounsel, or subcontracting arrangements.
(c) This section shall not limit the ability of any awarding
department to meet a goal higher than those set forth in subdivision
(a) for the participation of disabled veteran business enterprises in
contracts awarded by the awarding department.
999.2. (a) Notwithstanding any other provision of law, contracts
awarded by any state agency, department, officer, or other state
governmental entity, including school districts when they are
expending state funds for construction, professional services (except
those subject to Chapter 6 (commencing with Section 16850) of Part 3
of Division 4 of Title 2 of the Government Code), materials,
supplies, equipment, alteration, repair, or improvement shall have
statewide participation goals of not less than 3 percent for disabled
veteran business enterprises. These goals apply to the overall
dollar amount expended each year by the awarding department.
(b) For purposes of this section:
(1) "Broker" or "agent" means any individual or entity, or any
combination thereof, that does not have title, possession, control,
and risk of loss of materials, supplies, services, or equipment
provided to an awarding department, unless one or more certified
disabled veterans has 51 percent ownership of the quantity and value
of the materials, supplies, services, and of each piece of equipment
provided under the contract.
(2) "Equipment" means any piece of equipment that is used or
provided for rental to any state agency, department, officer, or
other state governmental entity, including equipment for which
operators are provided.
(3) "Equipment broker" means any broker or agent who rents
equipment to an awarding department.
(c) A disabled veteran business enterprise that rents equipment to
an awarding department shall be deemed to be an equipment broker
unless one or more disabled veterans has 51-percent ownership of the
quantity and the value of each piece of equipment. If the equipment
is owned by one or more disabled veterans, each disabled veteran
owner shall, prior to performance under any contract, submit to the
awarding department a declaration signed by the disabled veteran
owner stating that the owner is a disabled veteran and providing the
name, address, telephone number, and tax identification number of the
disabled veteran owner. Each disabled veteran owner shall submit his
or her federal income tax returns to the administering agency
pursuant to subdivision (g) as if he or she were a disabled veteran
business enterprise. The disabled veteran business enterprise of a
disabled veteran owner who fails to submit his or her tax returns
will be deemed to be an equipment broker.
(d) A disabled veteran business enterprise that rents equipment to
an awarding department shall, prior to performing the contract,
submit to the awarding department a declaration signed by each
disabled veteran owner and manager of the enterprise stating that the
enterprise obtained the contract by representing that the enterprise
was a disabled veteran business enterprise meeting and maintaining
all of the requirements of a disabled veteran business enterprise.
The declaration shall include the name, address, telephone number,
and tax identification number of the owner of each piece of equipment
identified in the contract.
(e) State funds expended for equipment rented from equipment
brokers pursuant to contracts awarded under this section shall not be
credited toward the 3-percent goal.
(f) A disabled veteran business enterprise that is a broker or
agent and that obtains a contract pursuant to subdivision (a) shall,
prior to performing the contract, disclose to the awarding department
that the business is a broker or agent. The disclosure shall be made
in a declaration signed and executed by each disabled veteran owner
and manager of the enterprise, declaring that the enterprise is a
broker or agent, and identifying the name, address, and telephone
number of the principal for whom the enterprise is acting as a broker
or agent.
(g) (1) A disabled veteran business enterprise, and each owner
thereof, shall, at the time of certification, submit to the
administering agency complete copies of the enterprise's federal
income tax returns for the three previous tax years.
(2) A disabled veteran business enterprise, and each owner
thereof, shall submit to the administering agency complete copies of
the enterprise's federal income tax returns that have a
postcertification due date, on or before the due date, including
extensions.
(3) A disabled veteran business enterprise that, and each owner
thereof who, has not submitted to the administering agency complete
copies of the enterprise's federal income tax returns for the three
tax years preceding certification nor for each postcertification tax
year for which a return was required to be filed, shall have 90 days
to submit those returns.
(4) A disabled veteran business enterprise that fails to comply
with any provision of this subdivision shall be prohibited from
participating in any state contract until the disabled veteran
business enterprise complies with the provisions of this subdivision.
Funds expended involving a disabled veteran business enterprise
during any period in which that enterprise is not in compliance with
the provisions of this subdivision shall not be credited toward the
awarding department's 3-percent goal.
(h) A disabled veteran business enterprise that fails to maintain
the certification requirements set forth in this article shall
immediately notify the awarding department and the administering
agency of that failure by filing a notice of failure that states with
particularity each requirement the disabled veteran business
enterprise has failed to maintain.
999.3. Notwithstanding Section 999.1, if a contract for
professional bond services of an underwriter is to be obtained by
competitive bid, the awarding department shall, at a minimum, take
all of the following actions:
(a) Deliver the notice of sale or other notification of intention
to issue the bonds to all disabled veteran business enterprises that
have listed their names with the awarding department for the purpose
of this notice and other qualified disabled veteran enterprises known
to the awarding department.
(b) State in all notices of sale and other notifications of
intention to issue bonds that disabled veteran business enterprises
are encouraged to respond.
(c) Require all submitting bidders to certify their awareness of
the goals of the awarding department in accordance with this article.
999.5. (a) The administering agency for the California Disabled
Veteran Business Enterprise Program is the Department of General
Services, except in the case of contracts for professional bond
services. The Department of General Services shall consult with the
California Disabled Veteran Business Enterprise Program Advocate,
appointed by the Secretary of the Department of Veterans Affairs
pursuant to Section 999.11, on all matters relating to the California
Disabled Veteran Business Enterprise Program. The Director of
General Services shall adopt written policies and guidelines
establishing a uniform process for state contracting that would
provide a disabled veteran business enterprise participation
incentive to bidders. The incentive program shall be used by all
state agencies when awarding contracts.
(b) The Department of Veterans Affairs shall do all of the
following:
(1) Establish a method of monitoring adherence to the goals
specified in Sections 999.1 and 999.2.
(2) Promote the California Disabled Veteran Business Enterprise
Program to the fullest extent possible.
(3) Maintain complete records of its promotional efforts.
(4) Establish a system to track the effectiveness of its efforts
to promote the California Disabled Veteran Business Enterprise
Program, which shall include regular, periodic surveys of newly
certified disabled veteran business enterprises to determine how they
learned of the program, why they became certified, and what their
experience with awarding departments has been.
(c) An awarding department shall not credit toward the department'
s 3-percent goal state funds expended on a contract with a disabled
veteran business enterprise that does not meet and maintain the
certification requirements.
(d) Upon completion of an awarded contract for which a commitment
to achieve a disabled veteran business enterprise goal was made, an
awarding department shall require the prime contractor that entered
into a subcontract with a disabled veteran business enterprise to
certify to the awarding department all of the following:
(1) The total amount the prime contractor received under the
contract.
(2) The name and address of the disabled veteran business
enterprise that participated in the performance of the contract.
(3) The amount each disabled veteran business enterprise received
from the prime contractor.
(4) That all payments under the contract have been made to the
disabled veteran business enterprise. An awarding department shall
keep that certification on file. A person or entity that knowingly
provides false information shall be subject to a civil penalty for
each violation in the minimum amount of two thousand five hundred
dollars ($2,500) and the maximum amount of twenty-five thousand
dollars ($25,000). An action for a civil penalty under this
subdivision may be brought by any public prosecutor in the name of
the people of the State of California and the penalty imposed shall
be enforceable as a civil judgment.
(e) A prime contractor may, subject to the approval of the
Department of General Services, replace a disabled veteran business
enterprise identified by the prime contractor in its bid or offer,
pursuant to subdivision (a) of Section 999.10, with another disabled
veteran business enterprise.
(f) The administering agency shall adopt rules and regulations,
including standards for good faith efforts, for the purpose of
implementing this section. Emergency regulations consistent with this
section may be adopted.
999.6. In implementing this article, the awarding department shall
utilize existing resources such as the Office of Small Business and
Disabled Veteran Business Enterprise Services, the Department of
Veterans Affairs, the federal Department of Veterans Affairs, and the
Small Business Administration.
999.8. (a) Notwithstanding anything in this article to the
contrary, the validity or enforceability of any bonds, or any
contract or any notes, or other obligations issued by the awarding
department to provide for the payment of any contract subject to this
article shall not be affected in any way by the failure of an
awarding department to meet the goals established under this article.
(b) No action may be maintained to enjoin the issuance of any
bonds to which this article applies or the enforcement of any
contract for professional bond services based on an awarding
department's failure to meet the goals set forth in Section 999.1.
999.9. (a) It shall be unlawful for a person to:
(1) Knowingly and with intent to defraud, fraudulently obtain,
retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain,
certification as a disabled veteran business enterprise for the
purpose of this article.
(2) Willfully and knowingly make a false statement with the intent
to defraud, whether by affidavit, report, or other representation,
to a state official or employee for the purpose of influencing the
certification or denial of certification of any entity as a disabled
veteran business enterprise.
(3) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a business entity that has
requested certification as a disabled veteran business enterprise.
(4) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person in fraudulently obtaining or
attempting to obtain, public moneys, contracts, or funds expended
under a contract, that are awarded by any state agency, department,
officer, or other state governmental agency, to which the person is
not entitled under this article.
(5) 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.
(6) Knowingly and with intent to defraud, fraudulently represent
that a commercially useful function is being performed by a disabled
veteran business enterprise in order to obtain or retain a bid
preference or a state contract.
(7) Willfully and knowingly make or subscribe to any statement,
declaration, or other document that is fraudulent or false as to any
material matter, whether or not that falsity or fraud is committed
with the knowledge or consent of the person authorized or required to
present the declaration, statement, or document.
(8) Willfully and knowingly aid or assist in, or procure, counsel,
or advise, the preparation or presentation of a declaration,
statement, or other document that is fraudulent or false as to any
material matter, regardless of whether that falsity or fraud is
committed with the knowledge or consent of the person authorized or
required to present the declaration, statement, or document.
(9) Willfully and knowingly fail to file any declaration or notice
with the awarding agency that is required by Section 999.2.
(10) Establish, or knowingly aid in the establishment of, or
exercise control over, a firm found to have violated any of
paragraphs (1) to (9), inclusive.
(b) Any person who violates any of the provisions of subdivision
(a) shall be guilty of a misdemeanor punishable by imprisonment in
the county jail not exceeding six months or by a fine not exceeding
one thousand dollars ($1,000), or by both. In addition, the person
shall be liable for a civil penalty of not less than ten thousand
dollars ($10,000) nor more than thirty thousand dollars ($30,000) for
the first violation, and a civil penalty of not less than thirty
thousand dollars ($30,000) nor more than fifty thousand dollars
($50,000) for each additional or subsequent violation. A defendant
who violates any of the provisions of subdivision (a) shall pay all
costs and attorney's fees incurred by the plaintiff in a civil action
brought pursuant to this section, including costs incurred by the
awarding department or the Department of General Services.
(c) (1) The Department of General Services shall suspend any
person who violates subdivision (a) 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 three years and not
more than 10 years, and if certified as a disabled veteran business
enterprise, the department shall revoke the business's certification,
and the small business or microbusiness enterprise certification if
the business has both certifications, for a period of not less than
five years. An additional or subsequent violation shall extend the
periods of suspension and revocation for a period of not less than 10
years. The suspension and revocation of certification shall apply to
the principals of the business and any subsequent business formed or
financed by, or affiliated with, one or more of those principals.
(2) A person that violates any of the provisions of subdivision
(a) shall pay all costs incurred by the awarding department and the
Department of General Services for any investigations that led to the
finding of the violation. Costs incurred shall include, but are not
limited to, costs and attorney's fees paid by the department or the
Department of General Services related to hearings and court
appearances.
(3) The Department of General Services shall prohibit any business
or person who fails to satisfy any of the penalties, costs, and
attorney's fees imposed pursuant to subdivisions (b) and (c) from
further contracting with the state until all of the penalties, costs,
and attorney's fees are satisfied.
(d) In addition to the penalties imposed by this section, if a
contractor is found to be in violation of paragraph (6) of
subdivision (a), any existing contract between that contractor and
any awarding department may be terminated at the discretion of the
awarding department, and, where payment to the contractor is made
directly by the state agency, the agency shall set off penalties and
costs due to the state against any payments due to that contractor.
In the event that the contracting state agency has forwarded the
contract and invoices to the Controller for payment, the state agency
shall reduce the amount due to the contractor as reflected in the
claim schedule submitted to the Controller by the amount of the
penalties and costs due the state. In addition, with regard to any
penalties and costs due to the state that the state agency has not
accounted for by either a set off against payments due to the
contractor or a reduction reflected in the claim schedule submitted
to the Controller, to the extent that the Controller is making
payments to the contractor on behalf of any state agency, the
Controller shall set off penalties and costs due against any invoices
due to the contractor from any other contract awarded to the
contractor.
(e) The awarding department shall report all alleged violations of
this section to the Department of General Services. After any review
and investigation it deems necessary, the Department of General
Services shall subsequently report all allegations which have
sufficient grounds to the Attorney General who shall determine
whether to bring a civil action against any person or firm for a
violation of this section. However, the Department of General
Services may pursue administrative action and administrative
penalties irrespective of whether the Attorney General chooses to
bring a civil action.
(f) The Department of General Services shall monitor the status of
all reported violations and shall 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.
(g) No awarding department shall enter into any contract with any
person suspended for violating this section during the period of the
person's suspension. No awarding department shall award a contract to
any contractor utilizing the services of any person as a
subcontractor suspended for violating this section during the period
of the person's suspension.
(h) The awarding department shall 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 for violating this section.
999.10. (a) Any awarding department taking bids in connection with
the award of any contract shall provide, in the general conditions
under which bids will be received, that any person making a bid or
offer to perform a contract shall, in his or her bid or offer, set
forth the following information:
(1) The name and the location of the place of business of each
subcontractor certified as a disabled veteran business enterprise who
will perform work or labor or render service to the prime contractor
in connection with the performance of the contract and who will be
used by the prime contractor to fulfill disabled veteran business
enterprise participation goals.
(2) The portion of work that will be done by each subcontractor
under paragraph (1). Except in cases of emergency where a contract is
necessary for the immediate preservation of the public health,
welfare, or safety, or protection of state property, the prime
contractor shall list only one subcontractor for each portion of work
as is defined by the prime contractor in his or her bid or offer.
(b) The Subletting and Subcontracting Fair Practices Act (Chapter
4 (commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code) shall apply to the information required by
subdivision (a) relating to subcontractors certified as disabled
veteran business enterprises.
(c) For purposes of this section, "subcontractor" and "prime
contractor" shall have the same meaning as those terms are defined in
Section 4113 of the Public Contract Code.
(d) As used in this section, "contract" does not include a
contract negotiated pursuant to Chapter 10 (commencing with Section
4525) of Division 5 of Title 1 of the Government Code.
999.11. The Secretary of the Department of Veterans Affairs shall
appoint the California Disabled Veteran Business Enterprise Program
Advocate. The California Disabled Veteran Business Enterprise Program
Advocate shall report directly to the secretary and shall do all of
the following:
(a) Oversee, promote, and coordinate efforts to facilitate
implementation of this article.
(b) Disseminate information on this article.
(c) Coordinate reports pursuant to Section 999.7.
(d) Coordinate with administering agencies and existing and
potential disabled veteran business enterprises to achieve the goals
specified in Sections 999.1 and 999.2.
(e) Coordinate with the California Disabled Veteran Business
Enterprise Program Advocate appointed in all awarding departments
pursuant to Section 999.12.
999.12. Each awarding department shall appoint an agency Disabled
Veteran Business Enterprise Program Advocate. This person shall be
the same individual appointed pursuant to Section 14846 of the
Government Code. The agency Disabled Veteran Business Enterprise
Program Advocate shall do all of the following:
(a) Assist certified disabled veteran business enterprises in
participating in that agency's contracting process.
(b) Assist contract officers in seeking disabled veteran business
enterprises to participate in the agency's contract and procurement
activities by performing outreach efforts to recruit disabled veteran
business enterprises to offer their services as either a prime
contractor or subcontractor on any contract proposed by the awarding
department that requires disabled veteran business enterprise
participation, and by other feasible means.
(c) Meet regularly with the California Disabled Veteran Business
Enterprise Program Advocate and contract and procurement staffs of
their departments to disseminate information about the California
Disabled Veteran Business Enterprise Program.
(d) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency's contractors or
subcontractors.
(e) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.
(f) Coordinate and meet, on a regular basis, with the California
Disabled Veteran Business Enterprise Program Advocate at the
Department of Veterans Affairs in an effort to meet the statewide
3-percent goal provided for in Section 999.2.
999.13. This article includes language similar to that contained in
Article 1.5 (commencing with Section 10115) of Chapter 1 of Part 2
of Division 2 of the Public Contract Code and does not create an
independent or additional goal or program.
