DISABLED VETERAN BUSINESS ENTERPRISE PARTICIPATION PROGRAM REQUIREMENTS - 1201

Authority

The Disabled Veteran Business Enterprise (DVBE) participation program for all State contracts is established in Public Contract Code (PCC), Section 10115et seq., Military and Veterans Code (M&VC), Section 999 et seq., and California Code of Regulations (CCR), Title 2, Section 1896.60 et seq.  Compliance with DVBE requirements is required for all State entities. 

Competitive Solicitation and the DVBE Participation Program Requirement

Departments must develop DVBE solicitation language to include in their competitive solicitations that complies with the DVBE participation program.

Unless statutorily exempt, the DVBE participation requirement applies to all contracts regardless of the solicitation format (e.g., RFQ, IFB, RFP) or dollar value.

Meeting DVBE Program Requirements 

If DVBE participation is a requirement of the competitive solicitation, then a bidder must document commitment to full DVBE participation. Documentation should demonstrate that the bidder identified, contacted and committed to using certified DVBE firms who will perform the percent of work specified by the solicitation.

DGS/PD’s OSDS publishes DVBE Resources on its web site that lists approved DVBE trade and focus papers.

Meeting DVBE Goals

There are two methods of meeting the goals:

1. For non-DVBE bidders:  Commit to use DVBEs for not less than the percentage specified in the solicitation, or
2. For DVBE bidders:  Commit to perform not less than the percentage specified in the solicitation with its own forces or in combination with other DVBEs.

Definition of Broker/Agency and Equipment Broker

M&VC Section 999.2(b) provides definitions for the following terms:

• “Broker” or “agent” means any individual or entity, or combination thereof, that does not have title, possession, control, and risk of loss of materials, supplies, services, or equipment provided to an awarding department, unless one or more certified disabled veterans has 51 percent ownership of the quantity and value of the materials, supplies, services, and of each piece of equipment provided under the contract.
• “Equipment broker” means any broker or agent who rents equipment, directly or indirectly, to an awarding department.

Broker/Agent Status for DVBE

The State must obtain declarations from certified DVBEs as identified below pursuant to M&VC sections 999.2(b) through 999.9.  The purpose is to eliminate the benefits of DVBE status from those contractors who are using their certified status and obtaining State funds, but working only as brokers or agents.  Therefore, in order to enable the State to verify that a DVBE is not an equipment broker, the DVBE’s Federal Tax Information Number must be reported on the STD. 843.

Click here to access the STD. 843, Disabled Veteran Business Enterprise Declaration

Impacted DVBEs

Declarations are to be obtained using a Disabled Veteran Business Enterprise Declaration (STD. 843) when the State intends to transact business:

• With a certified DVBE prime or
• For equipment rental situations, with either a certified DVBE prime or a prime who is using a certified DVBE subcontractor(s)

This pertains to all types of transactions including competitive and non-competitive situations.  It applies both when establishing Leveraged Procurement Agreements (LPAs) and when placing orders against LPAs.

Purchase Document Submission

FI$Cal Users, when DVBEs are involved as identified above:

• Departments that submit purchase documents for PD review and approval are to provide a copy of the Std. 843(s) by uploading it in FI$Cal and attaching it to a waiver form to send with the requisition.
• Purchase documents submitted to PD in conjunction with emergency acquisitions must include a copy of the Std. 843(s) by uploading it in FI$Cal and attaching it to a waiver form to send with the requisition.

Non-FI$Cal Users, when DVBEs are involved as identified above:

• Departments that submit purchase documents for PD review and approval are to provide a copy of the Std. 843(s).
• Purchase documents submitted to PD in conjunction with emergency acquisitions must include a copy of the Std. 843(s)

Declaration Information

As long as all other requirements are met (such as Commercially Useful Function), the State can still transact business with a DVBE that is determined to be a broker or agent or who declares that one or more of its DV owners or DV managers does not own at least 51% of the equipment to be rented; however, the DVBE:

• Will not receive the benefit of their certification for the respective transaction (This includes benefit, as applicable, for a DVBE incentive) and
• Participation (attributed to the DVBE that is the broker) will not count towards the awarding department’s annual DVBE participation goal.

OSDS Role

OSDS reviews and certifies DVBEs.  To support the requirements of M&VC sections 999.2(b) through 999.9, OSDS requires all DVBEs (both new applicants and those currently certified) to declare their status as a broker or agent, submit the business enterprise’s federal tax returns and – for those who rent equipment to the State – to submit their personal tax returns.

DVBEs who rent equipment to the State and who fail to submit their personal tax returns to OSDS automatically attain broker or agent status and will be considered non-certified for DVBE participation goal purposes.

Notify OSDS

Notify the OSDS, Compliance Unit, when the completed Std. 843 identifies that:

• A DVBE is a broker or agent (in Section 2 of the form)
• If rental equipment is to be provided, one or more of the DV owners or DV managers of the DVBE does not own at least 51% of the equipment to be rented (in Section 3 of the form)

When notifying OSDS, provide a copy of the Std. 843.  Also provide your contact information.

DVBE Responsibility

The law requires that a DVBE that fails to maintain certification requirements shall immediately notify departments with current contracts, and the administering department, of the situation.  The notification shall identify the particular certification requirement that has not been maintained (M&VC §999.2(h)).

Consequences

Failure of a DVBE to submit business enterprise federal tax returns to OSDS will:

• Prohibit benefit of DVBE certification in any State contract until compliance occurs
• Result in OSDS decertification of the DVBE
• Prohibit the DVBE from participating in State contracts until the business is in compliance
• Negate DVBE annual 3% participation credit for any funds expended involving the DVBE