This chapter shall be known and may be cited as the Small Business Procurement and Contract Act.

for property and services for the state.

The Legislature finds and declares that this chapter is a state law that provides assistance and services for persons regardless of immigration status within the meaning of Section 1621(d) of Title 8 of the United States Code.

As used in this chapter:

(B) For the purposes of public works contracts,

as defined in Section 1101 of the Public Contract Code, and engineering contracts, as described in Section 4525, for public works projects, awarded through competitive bids or otherwise, “small business” means an independently owned and operated business that is not dominant in its field of operation, the principal office of which is located in California, the officers of which are domiciled in California, and which, together with affiliates, has 200 or fewer employees, and average annual gross receipts of thirty-six million dollars ($36,000,000) or less over the previous three years.

This subparagraph shall become operative on January 1, 2019.

two million five hundred thousand dollars ($2,500,000) or less over the previous three years, or is a manufacturer, as defined in subdivision (c), with 25 or fewer employees. Commencing January 1, 2019, the average annual gross receipts threshold shall be five million dollars ($5,000,000).

may adjust that level to reflect changes in the California Consumer Price Index for all items.

subdivision shall be established by regulation, in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2, and shall preclude the qualification of businesses that are dominant in their industry. In addition, the standards shall provide that the certified small business or microbusiness shall provide goods or services that contribute to the fulfillment of the contract requirements by performing a commercially useful function, as defined below:

(ii) Carries out its obligation by actually performing, managing, or supervising the work involved.

(iii) Performs work that is normal for its business services and functions.

(iv) Is responsible, with respect to products, inventories, materials, and supplies required for the contract, for negotiating price, determining quality and quantity, ordering, installing, if applicable, and making payment.

(B) 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 small business or microbusiness participation.

In order to facilitate the participation of small business, including microbusiness, in the provision of goods, information technology, and services to the state, and in the construction, including alteration, demolition, repair, or improvement, of state facilities, the directors of the department and other state agencies that enter those contracts, each within their respective areas of responsibility, shall do all of the following:

business preference for bidders that provide for small business and microbusiness subcontractor participation, in the award of contracts for goods, information technology, services, and construction, as follows:

preference to small business or microbusiness shall be 5 percent of the highest responsible bidder’s total score. The preference to nonsmall business bidders that provide for small business or microbusiness subcontractor participation shall be up to a maximum 5 percent of the highest responsible bidder’s total score, determined according to rules and regulations established by the Department of General Services.

to make multiple awards, this fifty-thousand-dollar ($50,000) maximum preference cost shall be applied, to the extent possible, so as to maximize the dollar participation of small businesses, including microbusinesses, in the contract award.

and microbusiness bidders for each project bid upon within their prequalification rating. This may be accomplished by dividing major projects into subprojects so as to allow a small business or microbusiness contractor to qualify to bid on these subprojects.

with this chapter shall have precedence over nonsmall business bidders in that the application of a bidder preference for which nonsmall business bidders may be eligible under this section or any other provision of law shall not result in the denial of the award to a small business or microbusiness bidder. In the event of a precise tie between the low responsible bid of a bidder meeting specifications of a small business or microbusiness, and the low responsible bid of a bidder meeting the specifications of a disabled veteran-owned small business or microbusiness, the contract shall be awarded to the disabled veteran-owned small business or microbusiness. This provision applies if the small business or microbusiness bidder is the lowest responsible bidder, as well as if the small business or microbusiness bidder is eligible for award as the result of application of the small business and microbusiness bidder preference granted by subdivision (b).

the advertisement an internet link to information for prospective bidders, including, but not limited to, general bidding procedures and how to properly prepare a bid for those contracts.

whole or in part, with the proceeds of the act, shall do all of the following:

(A) Establish a 25 percent small business participation goal in all contracts that it finances, in whole or in part, with these federal funds.

(B) Beginning April 1, 2023, notify the agency’s small business liaison, designated pursuant to Section 14846, of any anticipated contracting opportunities that will be paid, in whole or in part, with funding from the Infrastructure Investment and Jobs Act during the 12 months following April 1, 2023.

Jobs Act funding, as described in subdivision (e).

Section 5096.800) of Division 5 of the Public Resources Code).

Wastewater Infrastructure Act of 2021 (33 U.S.C. Sec. 1251 et seq.).

the proceeds of the sale of the bonds described in this section, except as permitted by the measure authorizing the issuance of the bond.

microbusiness participation dollars for contracts funded by these bonds or federal dollars to the total contract dollars for contracts funded by these bonds or federal dollars.

The Legislature finds and declares all of the following:

disadvantaged communities the hardest.

No small business preference shall be allowed if allowing the small business preference would result in a computed bid of the preference recipient which would exceed the amount of funds appropriated by the Legislature for the construction project, plus any augmentation that may be made by the State Public Works Board pursuant to authority granted in the annual Budget Act.

of greater than five thousand dollars ($5,000), but less than two hundred fifty thousand dollars ($250,000), to a certified small business, including a microbusiness, or to a disabled veteran business enterprise, as long as the agency obtains price quotations from two or more certified small businesses, including microbusinesses, or from two or more disabled veterans business enterprises.

from responsible suppliers whenever there is reason to believe a response from a single source is not a fair and reasonable price.

thousand dollars ($250,000), to a certified small business, including a microbusiness, or to a disabled veteran business enterprise, if the California State University obtains price quotations from two or more certified small businesses, including microbusinesses, or from two or more disabled veteran business enterprises.

in subdivision (b) of Section 10105 of the Public Contract Code, to a certified small business, including a microbusiness, or to a disabled veteran business enterprise, as long as the agency obtains written bid submittals from two or more certified small businesses, including microbusinesses, or from two or more disabled veteran business enterprises.

price.

appointed by the Governor pursuant to Section 12098.3.

for simplification of specifications and terms in order to increase the opportunities for small business, microbusiness, minority-owned business, women-owned business, LGBTQ-owned business, and disabled veteran business enterprise participation.

be added as necessary by the respective entities.

origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Samoa, Guam, or the United States Trust Territories of the Pacific, including North Marianas); Asian-Indian (a person whose origins are from India, Pakistan, or Bangladesh).

perjury.

controlled by, one or more individuals who identifies as any of the following:

with Section 1798) of Part 4 of Division 3 of the Civil Code, the department may publicly display this information within the certification profile of the firm using the state’s certification system.

Upon completion of an awarded contract for which a commitment to achieve small business or disabled veteran business enterprise participation goals was made, the contractor shall report to the awarding department the actual percentage of small business and disabled veteran business enterprise participation that was achieved. A contract that includes disabled veteran business enterprise participation shall also meet the requirements of Article 6 (commencing with Section 999) of Chapter 6 of Division 4 of the Military and Veterans Code.

a contract to which it would not otherwise have been entitled, shall do all of the following:

involved.

Fund.

working days’ notice of the time and place thereof. The notice shall state the reasons for the hearing.

one or more

online

directories or databases of businesses certified by state agencies with industrial classification codes, such as the United Nations Standard Product and Service Codes, North American Industry Classification System, or Standard Industrial Classification, that include categories related to goods or commodities, services, information technology, and construction. For purposes of this subdivision, state certification shall include small businesses, disabled veteran business enterprises,

minority business enterprises, woman business enterprises, LGBTQ business enterprises, and persons with disabilities business enterprises.

procurement for small businesses and microbusinesses described in Section 14838.1.

business or microbusiness enterprise.

small business or microbusiness participation in order to obtain or retain a bid preference or a state contract.

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.

than thirty thousand dollars ($30,000) nor more than fifty thousand dollars ($50,000) for each additional or subsequent violation.

revoke the small business or microbusiness certification, and the disabled veteran business enterprise certification if the business has both certifications, of any person that violates subdivision (a) for a period of not less than five years, and shall, in addition to the penalties provided for in subdivision (b), suspend the person from bidding on, or participating as a contractor, a subcontractor, or a supplier in, any state contract or project for a period of not less than three years nor more than 10 years. However, for an additional or subsequent violation, the period of certification revocation or suspension shall be extended for a period of up to three years. The certification revocation shall apply to the principals of the business and any subsequent businesses formed by one or more of those principals. Any business or person who fails to satisfy any of the penalties imposed pursuant to

paragraphs (1) and (2) of subdivision (b) shall be prohibited from further contracting with the state until the penalties are satisfied.

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 state agency, 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.

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.

incurred by the city attorney, county attorney or county counsel, district attorney, or the Attorney General and the costs incurred by the awarding department and the Department of General Services.

(ii) A city attorney, county attorney or county counsel, or district attorney shall not bring an action for a civil penalty under this subparagraph if the Department of General Services has concluded an administrative action for the same violation. This clause does not apply to a civil action brought by the Attorney General.

(iii) In no event shall a monetary penalty be imposed through both an administrative action and a civil action for the same violation; however, the Department of General Services may impose any other penalty authorized by this section through an administrative

action irrespective of the outcome of a civil action brought pursuant to this subparagraph.

(iv) A city attorney, county attorney or county counsel, district attorney, and the Attorney General shall notify the Department of General Services before commencing an action under this subparagraph.

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 of California.

within the department’s consolidated annual report.