SB 1340: Small business liaison: contract information: small business procurement participation.

Existing law establishes the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development, led by the Small Business Advocate, and sets forth its powers and duties relating to advocacy on behalf of small businesses and providing small businesses with the information they need to survive in the marketplace.

Existing law, the Small Business Procurement and Contract Act, which requires the directors of the Department of General Services and other state agencies that enter specified contracts to establish a minimum goal for procurement participation for small businesses, including microbusinesses, in the provision of goods, information technology, and services to the state, and in the construction of state facilities, also requires a contractor, upon completion of a contract for which a commitment to achieve a small business or disabled business enterprise participation goal was made, to report to the awarding department the actual percentage of small business and disabled business enterprise participation that was achieved.

This bill would also require an awarding department, upon completion of a contract for which a commitment to achieve a small business or disabled business enterprise participation goal was made, to require a prime contractor that entered into a subcontract with a small business to certify specified information to the awarding department, including, among other things, the total amount that the prime contractor received under the contract, that all payments under the contract have been made to the small business, and the actual percentage of small business participation that was achieved. By requiring a prime contractor to certify this information, the bill would expand the crime of perjury and impose a state-mandated local program. The bill would require a prime contractor, after being awarded a contract pursuant to the act, to use the small businesses or microbusiness subcontractor proposed in its bid, proposal, or contract unless certain conditions are met.

Existing law, the State Contract Act except as specified, makes all contracts entered into by any state agency for the acquisition of goods or services, the construction, alteration, improvement, repair, or maintenance of property, real or personal, or the performance of work or services by the state agency for or in cooperation with any person, or public body, void unless and until approved by the Department of General Services.

This bill would require an awarding department, beginning on January 1, 2028, and annually thereafter, through its small business liaison, to make available a report on payment activity during the previous fiscal year related to all contracts awarded to a small business, as specified.

Existing law requires a state agency that significantly regulates small business or that significantly impacts small business to designate at least one person to serve as a small business liaison for the agency. Existing law requires these state agencies to notify the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development and the Department of General Services of specified information, including the name and contact information of the agency’s small business liaison.

This bill would require the small business liaison for each state agency to annually submit the above-described report on payment activity to the Office of Small Business Advocate. The bill would require the Office of Small Business Advocate to post that information on its internet website.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.