AB 21 is a law signed by California Governor Arnold Schwarzenegger as part of the July 2009 package of bills revising the state's budget for Fiscal Year 2009-2010. The text of AB 21 states that prime contractors MUST meet minority, women, and disabled veteran business enterprise utilization goals on state contracts. In other words, the law strikes the “good faith effort” requirement from California's Public Contracting Code. WARNING: The text of the law is not being implemented in full or on all state-funded contracts, so carefully read bid documents before proceeding with a good faith effort.
In short, yes. Sources at the California Department of Transportation have confirmed that AB 21 will only apply to disabled veteran business enterprise (DVBE) goals on state contracts. The Department of General Services has also stated that AB 21 will only be implemented concerning DVBE goals.
No. The “good faith effort” is still accepted for state contracts with disadvantaged business enterprise (DBE), small business enterprise goals (SBE), and minority and women business enterprise (M/WBE) utilization goals. Moreover, the law does not affect local projects funded solely by local governments. The good faith effort may even apply to some contracts with DVBE goals, though this has yet to be confirmed. To ensure that you meet a state contract's business outreach requirements, we recommend close inspection of the bid documents. If you are unsure about a bid's outreach requirements, we suggest you contact the agency awarding the contract for clarification.
Assembly member Noreen Evans (D-Santa Rosa) sponsored the legislation in Assembly, but Governor Arnold Schwarzenegger and the Department of General Services strongly pushed for the legislation in the final days of the July 2009 budget negotiations. AB 21 was passed unanimously in the Assembly and Senate.
Yes, the California Chapter of the Associated General Contractors of America and its partners have been vocal opponents of AB 21. They are currently lobbying for “emergency legislation” that will reverse AB 21 and reinstate the “good faith effort” as an alternative to mandatory disabled veteran business enterprise goals (DVBE) utilization goals on state contracts.
No. Bidders must subcontract DVBEs to perform a 'commercially useful funciton' (CUF) relevant to the project's scope of work in order to fulfill contract's DVBE participation goals. To read more about the CUF clause of California's Public Contract Code in our January 2008 Newsletter or on the Department of General Services website.
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