11

2004 Legislative Update2004 Legislative UpdateFebruary 2004February 2004

California Department of General Services California Department of General Services

Procurement DivisionProcurement Division

22

AgendaAgendaSummary of New Laws (& solicitation language)Summary of New Laws (& solicitation language)Additional information relating to AB 669 & SB Additional information relating to AB 669 & SB 1008 for SB/MB/DVBE1008 for SB/MB/DVBE– ““Commercially Useful Function”Commercially Useful Function”– Special Rules - DVBEs & equipment rentalSpecial Rules - DVBEs & equipment rental

New Laws Affecting Public Works ContractsNew Laws Affecting Public Works ContractsNew Solicitation and Contract Forms New Solicitation and Contract Forms Summary of Changes to General ProvisionsSummary of Changes to General ProvisionsAppendix 1 - Suggested Solicitation LanguageAppendix 1 - Suggested Solicitation LanguageAppendix 2 - Consolidated Statutory Language Appendix 2 - Consolidated Statutory Language for AB 669 & SB 1008for AB 669 & SB 1008

33

Summary of New LawsSummary of New Laws

Including Solicitation Including Solicitation LanguageLanguage

Chaptered bills can be accessed via the internet at WWW.LEGINFO.CA.GOV/BILINFO.HTML

44

AB 17AB 17Effective 1/1/Effective 1/1/20072007The The Domestic Partners ActDomestic Partners Act, prohibits a , prohibits a state agency from entering into or state agency from entering into or amending a amending a contract for the acquisition of contract for the acquisition of goods or services that exceed $100,000goods or services that exceed $100,000 with a contractor who, in the provision of with a contractor who, in the provision of benefits, discriminates between benefits, discriminates between employees with spouses and employees employees with spouses and employees with domestic partners, or discriminates with domestic partners, or discriminates between domestic partners and spouses between domestic partners and spouses of those employees. of those employees.

55

AB 17 Solicitation LanguageAB 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.

66

SB 20SB 20

Effective 1/1/04 Effective 1/1/04

The The Electronic Waste Recycling ActElectronic Waste Recycling Act requires prospective bidders of all requires prospective bidders of all purchases/leases of electronic devices to purchases/leases of electronic devices to certify compliance. certify compliance.

Bidders Instructions, General Provisions Bidders Instructions, General Provisions and solicitation language have been and solicitation language have been modified.modified.

77

SB 20 Solicitation LanguageSB 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…)

88

SB 20 Solicitation Language, SB 20 Solicitation Language, cont’d.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.

99

AB 296 (amended by AB 1756)AB 296 (amended by AB 1756)

Effective 1/1/04Effective 1/1/04All contracts shall be subject to the All contracts shall be subject to the requirements as amended in PCC 6611 requirements as amended in PCC 6611 that state in part, if a that state in part, if a contract negotiationcontract negotiation is determined to be in the state’s best is determined to be in the state’s best interest, that the process be performed by interest, that the process be performed by the Department of General Services.the Department of General Services.

NOTE:NOTE: DGS will determine which solicitations will DGS will determine which solicitations will include this language. Negotiations will be in include this language. Negotiations will be in accordance with guidelines that will be accordance with guidelines that will be established as required by law.established as required by law.

1010

AB 296 & 1756, continuedAB 296 & 1756, continuedASSEMBLY 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.

1111

AB 669 and SB 1008AB 669 and SB 1008

Effective 1/1/04 Effective 1/1/04 Both bills further articulate Both bills further articulate sanctionssanctions. . A revised DVBE evaluation document is A revised DVBE evaluation document is forthcoming. forthcoming. A document comparing the impact of A document comparing the impact of both laws is also available on the OSDC both laws is also available on the OSDC website website www.pd.dgs.ca.gov/smbuswww.pd.dgs.ca.gov/smbus. .

Details follow…Details follow…

1212

SB 578SB 578

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

1313

SB 578 Solicitation LanguageSB 578 Solicitation LanguageSENATE 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.

1414

SB 640SB 640

Effective 1/1/04 Effective 1/1/04

Prohibits state agencies from contracting Prohibits state agencies from contracting with a with a publicly-held expatriate publicly-held expatriate corporation or its subsidiariescorporation or its subsidiaries. .

Solicitation language has been developed. Solicitation language has been developed.

1515

SB 640 Solicitation LanguageSB 640 Solicitation LanguageSENATE 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.

1616

SB 1009SB 1009

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

1717

SB 1009 Solicitation LanguageSB 1009 Solicitation LanguageSENATE 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.

1818

Details of New Details of New SB/MB/DVBE LawsSB/MB/DVBE Laws

AB 669 & SB 1008AB 669 & SB 1008

1919

AB 669/SB 1008 HighlightsAB 669/SB 1008 Highlights

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

2020

AB 669 – “Commercially Useful AB 669 – “Commercially Useful Function” DefinedFunction” Defined

A firm is deemed to perform a commercially A firm is deemed to perform a commercially useful function if the business does useful function if the business does allall the the following: following: 1.1. Is responsible for the execution of a distinct Is responsible for the execution of a distinct

element of the work of the contract. element of the work of the contract.

2.2. Carries out its obligation by actually performing, Carries out its obligation by actually performing, managing or supervising the work involved. managing or supervising the work involved.

3.3. Performs work that is normal for its business Performs work that is normal for its business services and functions. services and functions.

4.4. Is not further subcontracting a greater portion of Is not further subcontracting a greater portion of the work than would be expected by normal the work than would be expected by normal industry practices. industry practices.

2121

What’s NOT a What’s NOT a commercially useful function?commercially useful function?A contractor, subcontractor, or supplier A contractor, subcontractor, or supplier will will notnot be considered to perform a be considered to perform a commercially useful function commercially useful function if the if the contractor's, subcontractor's or contractor's, subcontractor's or supplier's role is limited to that of an supplier's role is limited to that of an extra participant in a transaction, extra participant in a transaction, contract, or project through which contract, or project through which funds are passed in order to obtain the funds are passed in order to obtain the appearance of participation by a appearance of participation by a certified firm.certified firm.

2222

AB 669 Solicitation LanguageAB 669 Solicitation LanguageASSEMBLY 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 at WWW.PD.DGS.CA.GOV/SMBUS.

2323

SB 1008 Solicitation LanguageSB 1008 Solicitation LanguageSENATE 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 at WWW.PD.DGS.CA.GOV/SMBUS

2424

AB 669 & SB 1008 AB 669 & SB 1008 Statutory LanguageStatutory Language

A restatement of the amended code sections is A restatement of the amended code sections is available on the OSDC website at 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.

2525

Public Works ContractsPublic Works ContractsOr contracts that include a Or contracts that include a public works componentpublic works component

2626

AB 453AB 453

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

2727

AB 453 Solicitation LanguageAB 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.

2828

AB 807AB 807

Effective 1/1/04Effective 1/1/04

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

2929

AB 807 Solicitation LanguageAB 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.

3030

AB 902AB 902

Effective 1/1/04Effective 1/1/04

PCC 4107 is amended to authorize an PCC 4107 is amended to authorize an awarding authority to consent to awarding authority to consent to substituting a subcontractorsubstituting a subcontractor when the when the subcontractor listed in the bid fails or subcontractor listed in the bid fails or refuses to execute a written contract as refuses to execute a written contract as specified in the subcontractor’s bid.specified in the subcontractor’s bid.

3131

AB 902 Solicitation LanguageAB 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.

3232

SB 110SB 110

Effective 1/1/04Effective 1/1/04

PCC Sections 3400 and 10129 are PCC Sections 3400 and 10129 are amended to codify the law on amended to codify the law on substitution of materialssubstitution of materials, products, , products, things or services.things or services.

3333

SB 110 Solicitation LanguageSB 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.

3434

SB 966SB 966

Effective 1/1/04Effective 1/1/04

Labor Code Section 1726 is amended and Labor Code Section 1726 is amended and Section 1781 is added relating to recovery Section 1781 is added relating to recovery of increased costs under certain of increased costs under certain conditions. conditions.

LC 1781 LC 1781 does not apply to DGSdoes not apply to DGS, DOT and , DOT and DWR.DWR.

3535

SB 966 Solicitation LanguageSB 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.

3636

New Solicitation and New Solicitation and Contract FormsContract Forms

Revised 1-1-2004Revised 1-1-2004

3737

Jan. 1 2004 Form RevisionsJan. 1 2004 Form Revisions

For For General Provisions (both IT and General Provisions (both IT and non-IT)non-IT), used in all contracts over , used in all contracts over $5,000, see the following website:$5,000, see the following website:http://http://www.pd.dgs.ca.gov/modellangwww.pd.dgs.ca.gov/modellang/ /

GeneralProvisions.htmGeneralProvisions.htm

For For Bidder InstructionsBidder Instructions, see , see http://www.documents.dgs.ca.gov/pd/modellanhttp://www.documents.dgs.ca.gov/pd/modellang/BI012004.pdfg/BI012004.pdf

3838

Summary of Changes to Summary of Changes to General ProvisionsGeneral Provisions

Revised 1-1-2004Revised 1-1-2004

3939

Change Summary: Change Summary: IT GPsIT GPs

7c.  Add - This relates to delivery of products or 7c.  Add - This relates to delivery of products or services and the contractor responding to and services and the contractor responding to and resolving complaints brought to its attention.resolving complaints brought to its attention.  

51.  Embellished the paragraph - now known as 51.  Embellished the paragraph - now known as Sweatshop Labor (previously known as Forced, Sweatshop Labor (previously known as Forced, Indentured Labor)Indentured Labor)  

56.  Added - Electronic Waste Recycling Act of 56.  Added - Electronic Waste Recycling Act of 2003 - contractor certifies compliance with the 2003 - contractor certifies compliance with the requirements of the Act.requirements of the Act.

4040

Change Summary: Change Summary: Non-IT GPsNon-IT GPs

47.  Modified - now known as Sweatshop 47.  Modified - now known as Sweatshop Labor (previously known as Forced, Labor (previously known as Forced, Indentured Labor)Indentured Labor)

  

52.  Added - Electronic Waste Recycling 52.  Added - Electronic Waste Recycling Act of 2003 - contractor certifies Act of 2003 - contractor certifies compliance with the requirements of the compliance with the requirements of the Act.Act.

4141

Appendix 1Appendix 1

Suggested Solicitation Suggested Solicitation LanguageLanguage

(as of 1/8/04)(as of 1/8/04)

Also available on the Web atAlso available on the Web athttp://www.pd.dgs.ca.gov/http://www.pd.dgs.ca.gov/

4242

Appendix 2Appendix 2

Consolidated Statutory Consolidated Statutory Language for Language for

AB 669 & SB 1008AB 669 & SB 1008

Also available on the web at Also available on the web at www.pd.dgs.ca.gov/smbuswww.pd.dgs.ca.gov/smbus

4343

4444

APPENDIX 3APPENDIX 3

Current DVBE Program Current DVBE Program Requirements Requirements

(Solicitation Attachment)(Solicitation Attachment)

Undergoing revisionUndergoing revision

New form and policy available soonNew form and policy available soon

Check PD Website for latest versionCheck PD Website for latest version