THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY WASHINGTON, HUGHES, FERLO, FONTANA, KITCHEN, BREWSTER, STACK, YUDICHAK, FARNESE, COSTA, WILLIAMS, BLAKE AND BOSCOLA, MAY 3, 2011

REFERRED TO STATE GOVERNMENT, MAY 3, 2011  

AN ACT

Amending Title 62 (Procurement) of the Pennsylvania Consolidated

Statutes, further providing for definitions and for Statewide

bonding program; providing for mentor-protégé program, for

Small Business Reserve Program, for reciprocity of

certifications, for oversight and responsibility and for

prime contractors' performance; further providing for

contractors' and subcontractors' payment obligations; and

making appropriations.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2102 of Title 62 of the Pennsylvania

Consolidated Statutes is amended to read:

§ 2102.  Definitions.

Subject to section 2103 (relating to regulations), the

following words and phrases when used in this chapter shall have

the meanings given to them in this section unless the context

clearly indicates otherwise:

"Commonwealth agency."  The term shall include the following:

(1)  Any office, department, authority, board, multistate

agency or commission of the executive branch, including:

(i)  The Office of the Governor.

(ii)  The Office of Attorney General, the Department

of the Auditor General and the Treasury Department.

(iii)  The Pennsylvania State System of Higher

Education, consisting of the 14 State-owned universities

and the four State-related universities.

(iv)  An organization established by the Constitution

of Pennsylvania or a statute or executive order that

performs or is intended to perform an essential

governmental function.

(2)  The term shall not include a judicial or legislative

agency.

"Disadvantaged business."  A small business which is owned or

controlled by a majority of persons, not limited to members of

minority groups, who have been deprived of the opportunity to

develop and maintain a competitive position in the economy

because of social disadvantages or who are veterans or service

disabled veterans.

"Governmental agency."  A Commonwealth agency, local agency,

independent agency, State-affiliated entity or State-related

institution.

"Independent agency."  Any board, commission or other agency

or officer of the Commonwealth that is not subject to the policy

supervision and control of the Governor. The term shall not

include a legislative agency or a judicial agency.  

"Small business."  A business in the United States which is

independently owned, is not dominant in its field of operation

and employs [100] 250 or fewer employees. The department shall

have the authority to review the employee limit and gross

revenue threshold of $25,000,000 annually and make adjustments

to both or either to reflect changing industry norms and to

reflect the best interest of the Commonwealth.

Section 2.  Section 2105 heading of Title 62 is amended and

the section is amended by adding subsections to read:

§ 2105.  [Bonding and progress payments] Bond Surety and

Guarantee Program.

* * *

(a.1)  Establishment of program.--To enable small businesses

and disadvantaged businesses to build capacity and to

competitively bid on State and other public contracts, the

department shall establish the criteria and structure for a

Statewide bonding program for the purpose of assisting

disadvantaged businesses in competitively bidding on

Commonwealth contracts.

(a.2)  Appropriation.--The sum of $5,000,000, or as much

thereof as may be necessary, is appropriated annually to the

Department of Community of Economic Development for the fiscal

year July 1, 2011, to June 30, 2012, to carry out the purposes

of this section.

(a.3)  Program administration.--All moneys in the fund shall

be used to finance guarantees to bonding companies against

percentages of losses sustained as a result of defaults by

qualified disadvantaged businesses on a contract or project.

* * *

Section 3.  Title 62 is amended by adding sections to read:

§ 2109.  Mentor-protégé program.

(a)  Establishment.--To foster long-term business

relationships between disadvantaged businesses and prime

contractors and to assist, support and enable disadvantaged

businesses to successfully compete for prime and subcontract

awards by partnering with large companies, which shall serve as

mentors, in State contracts.

(b)  Consideration.--The mentor-protégé arrangement between a

prime contractor and disadvantaged business shall be an

important factor to be considered in the award of any

Commonwealth contract or award.

(c)  Guidelines.--The mentor-protégé program must be approved

by the agency and may include management, financial, technical,

organizational and operational assistance to help the

disadvantaged business grow and compete for contracting and

subcontracting opportunities.

§ 2110.  Small Business Reserve Program.

(a)  General rule.--The department shall establish a Small

Business Reserve Program for the purpose of increasing economic

opportunities for small and disadvantaged businesses and

affording small businesses, including disadvantaged businesses,

the opportunity to bid on State government contracts without

competing with larger businesses. All procurement, including

construction and professional services, shall be eligible for

designation for the Small Business Reserve Program Program and

shall be published in the same manner as required for a request

for proposal or an invitation for bid.

(b)  Reserve account.--Pursuant to section 2101 (relating to

policy), the department shall structure its procurement

procedures to reserve up to 10% of the total dollar value of its

procurement contracts, including public works, construction,

professional services and design professional services contracts

into its Small Business Reserve Program for award to qualified

small businesses.

(c)  Self-certification.--Under the Small Business Reserve

Program only, bidders shall self-certify that they are qualified

small businesses and verification of status shall be confirmed

by the awarding agency

§ 2111.  Alternative certification.

In order to create greater uniformity and consistency in the

Commonwealth's certification process, the department shall

accept the certification of the Pennsylvania Unified

Certification Program (PA UCP). Certification of any minority-

owned business, women-owned business or disadvantaged business

enterprise by the department may be accepted by any governmental

or public entity as being adequate certification for the purpose

of bidding or participating in any governmental or public bid,

contract or award.

§ 2112.  Oversight and responsibility.

(a)  General rule.--The department shall develop and

implement uniform templates, best practices and procedures to

increase oversight, transparency and accountability in

overseeing, administering, monitoring and enforcing requirements

to ensure increased and sustained contracting opportunities for

disadvantaged businesses.

(b)  Aspirational targets.--The department shall establish an

overall aspirational target of awarding 25% of procurement and

construction dollars to disadvantaged businesses in all State

contracts and grants, including, but not limited to, procurement

of goods and services, construction, professional services,

consulting, insurance, investment management, bond work, real

estate transactions and energy savings contracts. The

aspirational targets shall also apply to sole source contracts.

A contract with an optional renewal clause that did not have

initial disadvantaged business requirements at award time shall

be subject to disadvantaged business review and inclusion

requirements prior to the renewal of the contract.

(c)  Best practices.--Duties of the department shall include

the following best practices standards:

(1)  Ensure that disadvantaged business participation is

included as part of an agency's strategic priorities through

identification of measurable goals and objectives.

(2)  Develop a best practices manual for uniform

implementation of policies, practices, programs and

participation goals for disadvantaged businesses.

(3)  Establish a comprehensive quarterly and annual

reporting process, which includes the award amounts and

actual spending for contractors, subcontractors and

suppliers.

(4)  Designate a single point-of-contact to implement,

monitor and report work force utilization and agency

contractor participation.

(5)  Create a cross-agency small business support

services system to provide training, consulting information

management, business management and technical assistance to

disadvantaged businesses to develop the proficiency to

compete with majority contractors, vendors and consultants.

(6)  Identify uniform monitoring, enforcement, tracking

and reporting guidelines and practices.

(7)  Expand ability to measure and quantify the

effectiveness of disadvantaged business programs.

(8)  Review the department's e-marketplace system for

potential expansion to all State agencies.

(9)  Continue to connect disadvantaged businesses to

other entities, such as small business development centers,

minority business enterprise centers and professional

technical assistance centers, for financial and technical

assistance.

(d)  Reports.--All Commonwealth agencies, independent

agencies, State-affiliated agencies, quasi-independent agencies,

boards, commissions, colleges and universities shall track and

report quarterly on the award of contracts and grants to

disadvantaged businesses and on their utilization of and

spending with disadvantaged businesses to the chairman of the

Appropriations Committee of the Senate and the chairman of the

Appropriations Committee of the House of Representatives.

(e)  Monitoring and enforcement.--

(1)  The department and other State agencies shall

institute and implement all necessary monitoring and

enforcement of the provisions contained in this section.

(2)  A contractor that fails to make good faith efforts

in oversight and timely payment as defined under Subchapter D

of Chapter 39 (relating to prompt payment schedules) to a

disadvantaged business may be subject to the following

penalties at the discretion of the agency issuing the

contract:

(i)  Withholding of payments to the contractor.

(ii)  Prohibition from contracting with the

Commonwealth for no less than 12 months and no more than

36 months.

§ 2113.  Prime contractors' performance.

The department shall develop concise and detailed good faith

effort requirements for its prime contractors to ensure their

genuine attempt at meeting the Commonwealth's disadvantaged

business subcontractor participation requirements. Contractors

and grantees doing business with the Commonwealth shall make

reasonable and good faith efforts to provide maximum practicable

opportunities for small businesses and disadvantaged businesses

to participate as contractors, professional service providers,

subcontractors and suppliers, including the following:

(1)  Attend prebid or preproposal conferences.

(2)  Notify in writing about subcontracting opportunities

to disadvantaged businesses that perform the type of work to

be subcontracted in sufficient time to allow the businesses

to participate.

(3)  Advise small businesses or disadvantaged businesses

of the specific work the prime contractor intends to

subcontract, that their interest in the project is being

solicited and how to obtain information for the review and

inspection of the plans, specifications and requirements of

the bid.

(4)  Provide a written statement that economically

feasible portions of work were selected to be performed by

small businesses or disadvantaged businesses, including,

where appropriate, segmenting or combining elements of work

into economically feasible units.

(5)  Provide a statement of the efforts made to negotiate

with small businesses or disadvantaged businesses, including

the name, address and telephone number of the small

businesses or disadvantaged businesses that were contacted,

the date the negotiations took place and a description of the

information provided to the small businesses or disadvantaged

businesses regarding the plans, specifications and

requirements for the portion of the work to be performed.

(6)  Consult with the Bureau of Minority and Women

Business Opportunities to ensure significant contracting,

professional service, subcontracting and purchasing

opportunities for small businesses or disadvantaged

businesses unless the department agrees that contractor or

grantee participation in outreach activities will satisfy

this requirement.

(7)  Participate in outreach activities and events to

increase small business and disadvantaged business interest

and participation in contracting, professional service,

subcontracting and purchasing opportunities and the extent of

the contractor's or grantee's commitment to participate in

outreach participation shall be a consideration in the award

of any contract or grant.

(8)  Use the department's Internet website to identify

certified small businesses or disadvantaged businesses as

potential sources for professional service, subcontracting,

purchasing, construction, equipment, services and supplies.

(9)  Solicit certified small businesses or disadvantaged

businesses for all contracting, subcontracting, professional

service agreements and purchasing opportunities.

(10)  Include certified small businesses or disadvantaged

businesses on solicitation lists.

(11)  Prepare and keep records of solicitations,

including a bid tabulation, showing names of all firms

solicited and the dollar amount of the bid, quote or

proposal, as well as copies of all bids, quotes and proposals

received.

(12)  Provide quarterly reports to the department on

small business and disadvantaged business utilization.

(13)  Demonstrate good faith efforts in oversight and

timely payment, as defined under Subchapter D of Chapter 39

(relating to prompt payment schedules) to small businesses or

disadvantaged businesses and compliance with the

disadvantaged subcontractor commitment made at the time of

the award or thereafter.

Section 4.  Section 3933(c) of Title 62 is amended to read:

§ 3933.  Contractors' and subcontractors' payment obligations.

* * *

(c)  Payment.--When a subcontractor has performed in

accordance with the provisions of the contract, a contractor

shall pay to the subcontractor, and each subcontractor shall in

turn pay to its subcontractors, the full or proportional amount

received for each such subcontractor's work and material, based

on work completed or services provided under the subcontract,

[14] five days after receipt of a progress payment. Payment

shall be made under this section unless it is being withheld

under section 3934 (relating to withholding of payment for good

faith claims).

* * *

Section 5.  It is the intent of the General Assembly that the

additions and amendments to 62 Pa.C.S. Ch. 21 shall be enacted

and enforced in their entirety. Should any portion or provision

of the amendments or additions to 62 Pa.C.S. Ch. 21 be declared

unconstitutional, the remaining amendments or additions to 62

Pa.C.S. Ch. 21 shall remain in effect and be enforceable.

Section 6.  The provisions of this act are severable. If any

provision of this act or its application to any person or

circumstance is held invalid, the invalidity shall not affect

other provisions or applications of this act which can be given

effect without the invalid provision or application.

Section 7.  This act shall take effect in 60 days.