Public contracts: small businesses and disabled veteran business enterprises.

(1) Existing law provides for various programs to encourage the participation of small businesses and disabled veteran business enterprises, as certified by the Department of General Services, in state agency contracts. Existing law revokes, for a specified period, the small business or microbusiness certification of a business that obtained the classification as a small business or microbusiness by reason of having furnished incorrect supporting information or withholding relevant information, and suspends that business from transacting with the state, as specified. Existing law extends the period of revocation and suspension for additional or subsequent violations and requires the business to pay specified costs to the state related to the contract. This bill would increase the period of certification revocation and suspension for these violations, revoke the disabled veteran business enterprise certification of the business if the business has both certifications, revise the types of costs payable to the state, and additionally prohibit a business or person from contracting with the state until the amounts are paid. (2) Existing law also revokes, for a specified period, the small business or microbusiness or disabled veteran business enterprise certification of a person who, among other activities, fraudulently attempts to become certified as a disabled veteran business enterprise or as a small business or microbusiness and imposes civil penalties upon those persons. Existing law additionally suspends, for a specified period, that person from bidding on or participating in any state contract or project. Existing law extends the period of revocation and suspension for additional and subsequent violations, and requires the person to pay specified costs to the state related to the contract. This bill would increase the period of certification revocation and suspension for these violations, and would revoke both certifications for these violations if a business is certified both as a small business or microbusiness enterprise and a disabled veteran business enterprise. This bill would impose civil penalties against any person who knowingly and fraudulently represents that a commercially useful function is being performed by a disabled veteran business enterprise in order to obtain or retain a bid preference or a state contract, and would subject that person to revocation of the disabled veteran business enterprise certification and suspension from bidding on or participating in any state contract or project for a specified period. This bill would additionally authorize an awarding department and contractor to terminate a contract if the contractor knowingly and fraudulently represents that a commercially useful function is being performed by a disabled veteran business enterprise or by a small business or microbusiness, and require the awarding department and the Controller to set off penalties and costs awarded to the state against payments due to the contractor, as specified. This bill would require persons or businesses found to have obtained small business or disabled veteran business enterprise certification by fraudulent or improper means to pay costs incurred by the awarding department or the Department of General Services, as specified.