Service-disabled Veteran-owned Business In Procurement

In 2014, the general assembly established a goal that, in awarding contracts that are subject to the state 'Procurement Code', the state would award at least 3% of all contracts by dollar value to service-disabled veteran-owned small businesses. The bill changes the procurement goal into a requirement as follows:

• In the 2016-17 fiscal year, at least one percent of state contracts by dollar value shall be awarded to service-disabled veteran-owned small businesses;
• In the 2017-18 fiscal year, at least 2% of state contracts by dollar value shall be awarded to service-disabled veteran-owned small businesses; and
• In the 2018-19 fiscal year and in each fiscal year thereafter, at least 3% of state contracts by dollar value shall be awarded to service-disabled veteran-owned small businesses.

Current law allows a state agency to grant a preference to a service-disabled veteran-owned small business to satisfy the procurement goal. The bill maintains the ability for a state agency to grant such a preference to satisfy the procurement requirement and also allows a state agency to grant a preference for a business that includes in its bid that it will use at least one service-disabled veteran-owned small business as a subcontractor if the business is awarded the contract. The bill also authorizes a state agency to include work performed by a subcontractor that is a service-disabled veteran-owned small business to satisfy the procurement requirements.

If a business is given a preference on the basis of using one or more service-disabled veteran-owned small businesses as a subcontractor, the bill requires the business to submit certain information to the state agency that awarded the contract regarding the number of such subcontractors used and the approximate dollar value of work that was performed by such subcontractors.

Current law requires a business to be certified as a service-disabled veteran-owned small business by the center for veterans enterprise within the United States department of veterans affairs before being given a preference. Due to the significant amount of time that it takes for a business owner to obtain a service-disabled veteran-owned small business certification, the bill extends service-disabled veteran-owned eligibility to business owners who have applied for certification from the center for veterans enterprise and who have submitted certain documentation to the secretary of state's office regarding the business owner's release or discharge from active duty military, the business owner's military service-related disability, and the business owner's efforts to become an officially registered and verified service-disabled veteran-owned small business by the center for veterans enterprise.

The bill directs the secretary of state to create and maintain on its website a list of businesses that have not yet been officially registered and verified as a service-disabled veteran-owned small business by the center for veterans enterprise but that have submitted the required documentation for service-disabled veteran-owned small business eligibility. The bill specifies that businesses that are on the list maintained by the secretary of state are eligible for a preference in state contracting and authorizes a state agency to include work performed by businesses on the list to satisfy the procurement requirements.

In addition, the bill modifies the information that a business must submit with a bid to be eligible to receive the preference and modifies existing reporting requirements.

(Note: This summary applies to this bill as introduced.)