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2004 Legislative Update

2004 Legislative Update. February 2004. California Department of General Services Procurement Division. Agenda. Summary of New Laws (& solicitation language) Additional information relating to AB 669 & SB 1008 for SB/MB/DVBE “Commercially Useful Function”

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2004 Legislative Update

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  1. 2004 Legislative Update February 2004 California Department of General Services Procurement Division

  2. Agenda • Summary of New Laws (& solicitation language) • Additional information relating to AB 669 & SB 1008 for SB/MB/DVBE • “Commercially Useful Function” • Special Rules - DVBEs & equipment rental • New Laws Affecting Public Works Contracts • New Solicitation and Contract Forms • Summary of Changes to General Provisions • Appendix 1 - Suggested Solicitation Language • Appendix 2 - Consolidated Statutory Language for AB 669 & SB 1008

  3. Summary of New Laws Including Solicitation Language Chaptered bills can be accessed via the internet atWWW.LEGINFO.CA.GOV/BILINFO.HTML

  4. AB 17 • Effective 1/1/2007 • The Domestic Partners Act, prohibits a state agency from entering into or amending a contract for the acquisition of goods or services that exceed $100,000 with a contractor who, in the provision of benefits, discriminates between employees with spouses and employees with domestic partners, or discriminates between domestic partners and spouses of those employees.

  5. AB 17 Solicitation Language • ASSEMBLY BILL 17 (DOMESTIC PARTNERS):Pursuant to Public Contract Code Section 10295.3 no state agency may enter into any contract executed or amended after January 1, 2007, for the acquisition of goods or services in the amount of $100,000 or more with a contractor who, in the provision of benefits, discriminates between employees with spouses and employees with domestic partners, or discriminates between domestic partners and spouses of those employees.

  6. SB 20 • Effective 1/1/04 • The Electronic Waste Recycling Act requires prospective bidders of all purchases/leases of electronic devices to certify compliance. • Bidders Instructions, General Provisions and solicitation language have been modified.

  7. SB 20 Solicitation Language • SENATE BILL 20 (ELECTRONIC WASTE RECYCLING): This solicitation and any resulting contract shall be subject to all requirements as set forth in: • Article 10.3 (commencing with Section 25214.9) to Chapter 6.5 of Division 20 of the Health and Safety Code; and • Article 4 (commencing with Section 41516) to Chapter 3.5 of Part 2 and Chapter 8.5 (commencing with Section 42460) to Part 3 of Division 30 of the Public Resources Code. • (continued…)

  8. SB 20 Solicitation Language, cont’d. • These requirements include but are not limited to: • Submission of written certification submitted with bidder’s solicitation response that the supplier (or agents, subsidiaries, partners, joint venturers and subcontractors) are in compliance with the provisions of PRC Chapter 8.5, electronic waste recycling, or • Demonstration by the bidder at bid submission that this Chapter is inapplicable to all lines of business engaged by the supplier, (or related agents, subsidiaries, partners, joint venturers and subcontractors). Failure to comply with and provide information when requested will cause the supplier’s bid response to be considered non-responsive and their bid will be rejected.

  9. AB 296 (amended by AB 1756) • Effective 1/1/04 • All contracts shall be subject to the requirements as amended in PCC 6611 that state in part, if a contract negotiation is determined to be in the state’s best interest, that the process be performed by the Department of General Services. NOTE: DGS will determine which solicitations will include this language. Negotiations will be in accordance with guidelines that will be established as required by law.

  10. AB 296 & 1756, continued ASSEMBLY BILLS 1756 (CHAPTERED 8/11/03) & 296 (CHAPTERED 10/11/03): • AB 1756 amends Labor Code Section 1777.5 in relationship to apprentice contributions. • It also added Public Contract Code Section 6611 relating to negotiating certain contracts. Further guidelines are being developed. • AB 296 amended PCC 6611 to delete construction services from the list of those contracts that may be negotiated. • AB 296 also added Government Code Section 14612.2 which states that no state agency may be required to use The Office of State Publishing. But, state agencies soliciting bids from the private sector on amounts anticipated to cost more than $5,000 must also solicit a bid from the Office of State Publishing.

  11. AB 669 and SB 1008 • Effective 1/1/04 • Both bills further articulate sanctions. • A revised DVBE evaluation document is forthcoming. • A document comparing the impact of both laws is also available on the OSDC website www.pd.dgs.ca.gov/smbus. • Details follow…

  12. SB 578 • Effective 1/1/04 • No contract for laundering of apparel or for procurement of equipment, materials, or supplies may be entered into without certification of compliance to requirements of the Sweatfree Code of Conduct as developed by Department of Industrial Relations. • General Provisions and solicitation language have been modified.

  13. SB 578 Solicitation Language SENATE BILL 578 (SWEATFREE CODE OF CONDUCT): This solicitation and any resulting contract shall be subject to all requirements as set forth in Public Contract Code Section 6108, which includes, but is not limited to, providing written certification of compliance issued from the Department of Industrial Relations. Failure of the supplier to comply with and provide information, when requested by the awarding department within the time indicated, will cause the supplier’s bid response to be considered non-responsive and their bid will be rejected.

  14. SB 640 • Effective 1/1/04 • Prohibits state agencies from contracting with a publicly-held expatriate corporation or its subsidiaries. • Solicitation language has been developed.

  15. SB 640 Solicitation Language SENATE BILL 640 (CALIFORNIA TAXPAYER AND SHAREHOLDER PROTECTION ACT OF 2003): This solicitation and any resulting contract are subject to all requirements as set forth in Part 2 of Division 2 of the Public Contract Code Section 25111 and Section 25113 which includes, but is not limited to, providing written submission of a declaration stating that the supplier is eligible to contract with the State of California pursuant to statutory requirements. Failure of the supplier to comply with and provide information, when requested by the awarding department within the time indicated, will cause the supplier’s bid response to be considered non-responsive and their bid will be rejected.

  16. SB 1009 • Effective 1/1/04 • Prohibits state agencies from contracting with any vendor or any of its affiliates unless a reseller’s permit or certification of registration with the California Board of Equalization is provided prior to contract award. • Bidder’s Instructions and solicitation language have been modified.

  17. SB 1009 Solicitation Language SENATE BILL 1009 (USE TAX COLLECTION): This solicitation and any resulting contract shall be subject to all requirements as set forth in Sections 6487, 7101 and Sections 6452.1, 6487.3, 18510 of the Revenue and Taxation Code, and Section 10295.1 of the Public Contract Code requiring suppliers to provide a copy of their reseller’s permit or certification of registration and, if applicable, the permit or certification of all participating affiliates, issued by California’s State Board of Equalization. Effective January 1, 2004, awarding departments must obtain, prior to award, copies of the permits or certifications from the proposed awardee. Failure of the supplier to comply by supplying the required permit or certification will cause the supplier’s bid response to be considered non-responsive and their bid rejected. Unless otherwise specified in this solicitation, a copy of the reseller’s permit or certification of registration must be supplied within five (5) state business days of the request made by the State.

  18. Details of New SB/MB/DVBE Laws AB 669 & SB 1008

  19. AB 669/SB 1008 Highlights • AB 669 requires SB/MB/DVBE perform a commercially useful function (as prime or subcontractor) • SB 1008 requires DVBEs renting equipment to the state to provide a declaration stating the ownership of each piece of equipment OR that the firm is acting as broker/agent. • AB 669 redefines DV as “domiciled” in California. • SB 1008 permits a Ltd. Liability Co. to be certified as a DVBE when wholly owned by 1/more DVs.

  20. AB 669 – “Commercially Useful Function” Defined • A firm is deemed to perform a commercially useful function if the business does all the following: • Is responsible for the execution of a distinct element of the work of the contract. • Carries out its obligation by actually performing, managing or supervising the work involved. • Performs work that is normal for its business services and functions. • Is not further subcontracting a greater portion of the work than would be expected by normal industry practices.

  21. What’s NOT a commercially useful function? • 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 participation by a certified firm.

  22. AB 669 Solicitation Language ASSEMBLY BILL 669 (SMALL BUSINESS AND DVBE COMMERCIALLY USEFUL FUNCTIONS): This solicitation and any resulting contract shall be subject to all requirements as set forth in amended: • Gov’t Code Sections 14837, 14838.6, 14839, 14842, 14842.5 and the • Military and Veterans Code Sections 999, 999.6. These amended code sections in part redefine the requirements to qualify as a California Certified Small Business, Microbusiness and Disabled Veteran Business Enterprise. Effective January 1, 2004, the aforementioned companies must perform a commercially useful function to be eligible for award. The bill also adds to the definition of a DVBE that the qualifying disabled veteran be “domiciled” in California. Failure of the supplier to comply with the definition and detailed requirements for providing a commercially useful function will cause the supplier’s bid response to be considered non-responsive and their bid rejected. Contractors found to be in violation of certain provisions contained within these codes may be subject to loss of certification, penalties and contract cancellation. See also Senate Bill 1008. Additional information relating to the small business and disabled veteran business programs is available on the internet atWWW.PD.DGS.CA.GOV/SMBUS.

  23. SB 1008 Solicitation Language SENATE BILL 1008 (REDEFINES DVBE REQUIREMENTS FOR EQUIPMENT RENTAL AND BROKERING): This solicitation and any resulting contract shall be subject to all requirements as set forth in amended Military and Veterans Code Sections 999.2, 999.5, 999.7, 999.9 and added Public Contract Code Section 10115.9 which in part redefines the requirements for Disabled Veteran Business Enterprises for the purposes of equipment rental. Effective January 1, 2004, awarding departments are prohibited from claiming the 3% goal attainment of a Disabled Veteran Business Enterprise that acts as a broker or agent for the purposes of equipment rental. The supplier must provide written submission of a declaration stating that they are acting as a broker or agent signed by any/all DVBE owners and the enterprise manager prior to any contract award. Additionally, PCC §10115.9 was added to require that a limited liability company must be wholly owned by one or more disabled veterans. Failure of the supplier to comply with the definition and detailed requirements for providing a commercially useful function will cause the supplier’s bid response to be considered non-responsive and their bid will be rejected. See also Assembly Bill 669. Additional information relating to the small business and disabled veteran business programs is available on the internet atWWW.PD.DGS.CA.GOV/SMBUS

  24. AB 669 & SB 1008 Statutory Language • A restatement of the amended code sections is available on the OSDC website at WWW.PD.DGS.CA.GOV/SMBUS • It is important to use this version to understand the final language as both bills made different changes to some of the same code sections. • These changes significantly strengthened the SB/DVBE programs and more guidance will be provided on analyzing bids and determining compliance with the latest laws. • For questions, please contact OSDC.

  25. Public Works Contracts Or contracts that include a public works component

  26. AB 453 • Effective 1/1/04 • The Unjust Enrichment Act, provides for payment under the provisions of PCC 5110, when a competitively bid public works project has been challenged and the contract is subsequent to award been determined to be invalid. • Bidder instructions (established by OLS or agencies) and solicitation language have been modified.

  27. AB 453 Solicitation Language • ASSEMBLY BILL 453 (UNJUST ENRICHMENT): Pursuant to Public Contract Code Section 5110, for a competitively bid public works project where the award is challenged, the contract may be entered into pending final decision of the challenge. If the contract is later determined to be invalid the contractor may be paid under the provisions of PCC 5110.

  28. AB 807 • Effective 1/1/04 • The Prevailing Wages Act, in accordance with the amended Labor Code Section 1773.1, provides that an employer may take a credit for employer payments even if contributions are not made or costs not paid, when certain conditions are met.

  29. AB 807 Solicitation Language • ASSEMBLY BILL 807 (PREVAILING WAGES): Labor Code Section 1773.1 is amended to provide that an employer may take a credit for employer payments even if contributions are not made or costs not paid, as specified, if certain conditions are met.

  30. AB 902 • Effective 1/1/04 • PCC 4107 is amended to authorize an awarding authority to consent to substituting a subcontractor when the subcontractor listed in the bid fails or refuses to execute a written contract as specified in the subcontractor’s bid.

  31. AB 902 Solicitation Language • ASSEMBLY BILL 902 (SUBCONTRACTOR SUBSTITUTION):Public Contract Code Section 4107 is amended to authorize an awarding authority to consent to substituting a subcontractor when the subcontractor listed in the bid fails or refuses to execute a written contract for the scope of work specified in the subcontractor’s bid and at the price specified in the subcontractor’s bid.

  32. SB 110 • Effective 1/1/04 • PCC Sections 3400 and 10129 are amended to codify the law on substitution of materials, products, things or services.

  33. SB 110 Solicitation Language SENATE BILL 110 (MATERIALS SUBSTITUTION): Public Contract Code Sections 3400 and 10129 are amended to codify the law on substitution of materials, products, things or services.

  34. SB 966 • Effective 1/1/04 • Labor Code Section 1726 is amended and Section 1781 is added relating to recovery of increased costs under certain conditions. • LC 1781 does not apply to DGS, DOT and DWR.

  35. SB 966 Solicitation Language • SENATE BILL 966 (PREVAILING WAGES): Labor Code Section 1726 is amended and Section 1781 is added relating to recovery of increased costs under certain conditions. LC 1781 does not apply to the Department of General Services, the Department of Transportation and the Department of Water Resources.

  36. New Solicitation and Contract Forms Revised 1-1-2004

  37. For General Provisions (both IT and non-IT), used in all contracts over $5,000, see the following website: http://www.pd.dgs.ca.gov/modellang/ GeneralProvisions.htm For Bidder Instructions, see http://www.documents.dgs.ca.gov/pd/modellang/BI012004.pdf Jan. 1 2004 Form Revisions

  38. Summary of Changes to General Provisions Revised 1-1-2004

  39. Change Summary: IT GPs • 7c.  Add - This relates to delivery of products or services and the contractor responding to and resolving complaints brought to its attention. • 51.  Embellished the paragraph - now known as Sweatshop Labor (previously known as Forced, Indentured Labor) • 56.  Added - Electronic Waste Recycling Act of 2003 - contractor certifies compliance with the requirements of the Act.

  40. Change Summary: Non-IT GPs • 47.  Modified - now known as Sweatshop Labor (previously known as Forced, Indentured Labor) • 52.  Added - Electronic Waste Recycling Act of 2003 - contractor certifies compliance with the requirements of the Act.

  41. Appendix 1Suggested Solicitation Language(as of 1/8/04) Also available on the Web at http://www.pd.dgs.ca.gov/

  42. Appendix 2Consolidated Statutory Language for AB 669 & SB 1008 Also available on the web at www.pd.dgs.ca.gov/smbus

  43. APPENDIX 3Current DVBE Program Requirements (Solicitation Attachment) • Undergoing revision • New form and policy available soon • Check PD Website for latest version

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