1Amending Title 62 (Procurement) of the Pennsylvania Consolidated
2Statutes, further providing for definitions and for Statewide
3bonding program; providing for mentor-protégé program, for
4Small Business Reserve Program, for reciprocity of 
5certifications, for oversight and responsibility and for 
6prime contractors' performance; further providing for 
7contractors' and subcontractors' payment obligations; and 
8making appropriations.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1.  Section 2102 of Title 62 of the Pennsylvania
12Consolidated Statutes is amended to read:

13§ 2102.  Definitions.

14Subject to section 2103 (relating to regulations), the
15following words and phrases when used in this chapter shall have
16the meanings given to them in this section unless the context
17clearly indicates otherwise:

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

19(1)  Any office, department, authority, board, multistate
20agency or commission of the executive branch, including:

1(i)  The Office of the Governor.

2(ii)  The Office of Attorney General, the Department
3of the Auditor General and the Treasury Department.

4(iii)  The Pennsylvania State System of Higher
5Education, consisting of the 14 State-owned universities
6and the four State-related universities.

7(iv)  An organization established by the Constitution
8of Pennsylvania or a statute or executive order that
9performs or is intended to perform an essential
10governmental function.

11(2)  The term shall not include a judicial or legislative
12agency.

13"Disadvantaged business."  A small business which is owned or 
14controlled by a majority of persons, not limited to members of 
15minority groups, who have been deprived of the opportunity to 
16develop and maintain a competitive position in the economy 
17because of social disadvantages or who are veterans or service 
18disabled veterans.

19"Governmental agency."  A Commonwealth agency, local agency,
20independent agency, State-affiliated entity or State-related
21institution.

22"Independent agency."  Any board, commission or other agency 
23or officer of the Commonwealth that is not subject to the policy 
24supervision and control of the Governor. The term shall not 
25include a legislative agency or a judicial agency.  

26"Small business."  A business in the United States which is 
27independently owned, is not dominant in its field of operation 
28and employs [100] 250 or fewer employees. The department shall 
29have the authority to review the employee limit and gross 
30revenue threshold of $25,000,000 annually and make adjustments 

1to both or either to reflect changing industry norms and to 
2reflect the best interest of the Commonwealth.

3Section 2.  Section 2105 heading of Title 62 is amended and
4the section is amended by adding subsections to read:

5§ 2105.  [Bonding and progress payments] Bond Surety and 
6Guarantee Program.

7* * *

8(a.1)  Establishment of program.--To enable small businesses
9and disadvantaged businesses to build capacity and to
10competitively bid on State and other public contracts, the
11department shall establish the criteria and structure for a
12Statewide bonding program for the purpose of assisting
13disadvantaged businesses in competitively bidding on
14Commonwealth contracts.

15(a.2)  Appropriation.--The sum of $5,000,000, or as much
16thereof as may be necessary, is appropriated annually to the
17Department of Community of Economic Development for the fiscal
18year July 1, 2013, to June 30, 2014, to carry out the purposes
19of this section.

20(a.3)  Program administration.--All moneys in the fund shall
21be used to finance guarantees to bonding companies against
22percentages of losses sustained as a result of defaults by
23qualified disadvantaged businesses on a contract or project.

24* * *

25Section 3.  Title 62 is amended by adding sections to read:

26§ 2109.  Mentor-protégé program.

27(a)  Establishment.--To foster long-term business
28relationships between disadvantaged businesses and prime
29contractors and to assist, support and enable disadvantaged
30businesses to successfully compete for prime and subcontract

1awards by partnering with large companies, which shall serve as
2mentors, in State contracts.

3(b)  Consideration.--The mentor-protégé arrangement between a
4prime contractor and disadvantaged business shall be an
5important factor to be considered in the award of any
6Commonwealth contract or award.

7(c)  Guidelines.--The mentor-protégé program must be approved
8by the agency and may include management, financial, technical,
9organizational and operational assistance to help the
10disadvantaged business grow and compete for contracting and
11subcontracting opportunities.

12§ 2110.  Small Business Reserve Program.

13(a)  General rule.--The department shall establish a Small
14Business Reserve Program for the purpose of increasing economic
15opportunities for small and disadvantaged businesses and
16affording small businesses, including disadvantaged businesses,
17the opportunity to bid on State government contracts without
18competing with larger businesses. All procurement, including
19construction and professional services, shall be eligible for
20designation for the Small Business Reserve Program Program and
21shall be published in the same manner as required for a request
22for proposal or an invitation for bid.

23(b)  Reserve account.--Pursuant to section 2101 (relating to
24policy), the department shall structure its procurement
25procedures to reserve up to 10% of the total dollar value of its
26procurement contracts, including public works, construction,
27professional services and design professional services contracts
28into its Small Business Reserve Program for award to qualified
29small businesses.

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

1Program only, bidders shall self-certify that they are qualified
2small businesses and verification of status shall be confirmed
3by the awarding agency

4§ 2111.  Alternative certification.

5In order to create greater uniformity and consistency in the
6Commonwealth's certification process, the department shall
7accept the certification of the Pennsylvania Unified
8Certification Program (PA UCP). Certification of any minority-
9owned business, women-owned business or disadvantaged business
10enterprise by the department may be accepted by any governmental
11or public entity as being adequate certification for the purpose
12of bidding or participating in any governmental or public bid,
13contract or award.

14§ 2112.  Oversight and responsibility.

15(a)  General rule.--The department shall develop and
16implement uniform templates, best practices and procedures to
17increase oversight, transparency and accountability in
18overseeing, administering, monitoring and enforcing requirements
19to ensure increased and sustained contracting opportunities for
20disadvantaged businesses.

21(b)  Aspirational targets.--The department shall establish an
22overall aspirational target of awarding 25% of procurement and
23construction dollars to disadvantaged businesses in all State
24contracts and grants, including, but not limited to, procurement
25of goods and services, construction, professional services,
26consulting, insurance, investment management, bond work, real
27estate transactions and energy savings contracts. The
28aspirational targets shall also apply to sole source contracts.
29A contract with an optional renewal clause that did not have
30initial disadvantaged business requirements at award time shall

1be subject to disadvantaged business review and inclusion
2requirements prior to the renewal of the contract.

3(c)  Best practices.--Duties of the department shall include
4the following best practices standards:

5(1)  Ensure that disadvantaged business participation is
6included as part of an agency's strategic priorities through
7identification of measurable goals and objectives.

8(2)  Develop a best practices manual for uniform
9implementation of policies, practices, programs and
10participation goals for disadvantaged businesses.

11(3)  Establish a comprehensive quarterly and annual
12reporting process, which includes the award amounts and
13actual spending for contractors, subcontractors and
14suppliers.

15(4)  Designate a single point-of-contact to implement,
16monitor and report work force utilization and agency
17contractor participation.

18(5)  Create a cross-agency small business support
19services system to provide training, consulting information
20management, business management and technical assistance to
21disadvantaged businesses to develop the proficiency to
22compete with majority contractors, vendors and consultants.

23(6)  Identify uniform monitoring, enforcement, tracking
24and reporting guidelines and practices.

25(7)  Expand ability to measure and quantify the
26effectiveness of disadvantaged business programs.

27(8)  Review the department's e-marketplace system for
28potential expansion to all State agencies.

29(9)  Continue to connect disadvantaged businesses to
30other entities, such as small business development centers,

1minority business enterprise centers and professional
2technical assistance centers, for financial and technical
3assistance.

4(d)  Reports.--All Commonwealth agencies, independent
5agencies, State-affiliated agencies, quasi-independent agencies,
6boards, commissions, colleges and universities shall track and
7report quarterly on the award of contracts and grants to
8disadvantaged businesses and on their utilization of and
9spending with disadvantaged businesses to the chairman of the
10Appropriations Committee of the Senate and the chairman of the
11Appropriations Committee of the House of Representatives.

12(e)  Monitoring and enforcement.--

13(1)  The department and other State agencies shall
14institute and implement all necessary monitoring and
15enforcement of the provisions contained in this section.

16(2)  A contractor that fails to make good faith efforts
17in oversight and timely payment as defined under Subchapter D
18of Chapter 39 (relating to prompt payment schedules) to a
19disadvantaged business may be subject to the following
20penalties at the discretion of the agency issuing the
21contract:

22(i)  Withholding of payments to the contractor.

23(ii)  Prohibition from contracting with the
24Commonwealth for no less than 12 months and no more than
2536 months.

26§ 2113.  Prime contractors' performance.

27The department shall develop concise and detailed good faith
28effort requirements for its prime contractors to ensure their
29genuine attempt at meeting the Commonwealth's disadvantaged
30business subcontractor participation requirements. Contractors

1and grantees doing business with the Commonwealth shall make
2reasonable and good faith efforts to provide maximum practicable
3opportunities for small businesses and disadvantaged businesses
4to participate as contractors, professional service providers,
5subcontractors and suppliers, including the following:

6(1)  Attend prebid or preproposal conferences.

7(2)  Notify in writing about subcontracting opportunities
8to disadvantaged businesses that perform the type of work to
9be subcontracted in sufficient time to allow the businesses
10to participate.

11(3)  Advise small businesses or disadvantaged businesses
12of the specific work the prime contractor intends to
13subcontract, that their interest in the project is being
14solicited and how to obtain information for the review and
15inspection of the plans, specifications and requirements of
16the bid.

17(4)  Provide a written statement that economically
18feasible portions of work were selected to be performed by
19small businesses or disadvantaged businesses, including,
20where appropriate, segmenting or combining elements of work
21into economically feasible units.

22(5)  Provide a statement of the efforts made to negotiate
23with small businesses or disadvantaged businesses, including
24the name, address and telephone number of the small
25businesses or disadvantaged businesses that were contacted,
26the date the negotiations took place and a description of the
27information provided to the small businesses or disadvantaged
28businesses regarding the plans, specifications and
29requirements for the portion of the work to be performed.

30(6)  Consult with the Bureau of Minority and Women

1Business Opportunities to ensure significant contracting,
2professional service, subcontracting and purchasing
3opportunities for small businesses or disadvantaged
4businesses unless the department agrees that contractor or
5grantee participation in outreach activities will satisfy
6this requirement.

7(7)  Participate in outreach activities and events to
8increase small business and disadvantaged business interest
9and participation in contracting, professional service,
10subcontracting and purchasing opportunities and the extent of
11the contractor's or grantee's commitment to participate in
12outreach participation shall be a consideration in the award
13of any contract or grant.

14(8)  Use the department's Internet website to identify
15certified small businesses or disadvantaged businesses as
16potential sources for professional service, subcontracting,
17purchasing, construction, equipment, services and supplies.

18(9)  Solicit certified small businesses or disadvantaged
19businesses for all contracting, subcontracting, professional
20service agreements and purchasing opportunities.

21(10)  Include certified small businesses or disadvantaged
22businesses on solicitation lists.

23(11)  Prepare and keep records of solicitations,
24including a bid tabulation, showing names of all firms
25solicited and the dollar amount of the bid, quote or
26proposal, as well as copies of all bids, quotes and proposals
27received.

28(12)  Provide quarterly reports to the department on
29small business and disadvantaged business utilization.

30(13)  Demonstrate good faith efforts in oversight and

1timely payment, as defined under Subchapter D of Chapter 39
2(relating to prompt payment schedules) to small businesses or
3disadvantaged businesses and compliance with the
4disadvantaged subcontractor commitment made at the time of
5the award or thereafter.

6Section 4.  Section 3933(c) of Title 62 is amended to read:

7§ 3933.  Contractors' and subcontractors' payment obligations.

8* * *

9(c)  Payment.--When a subcontractor has performed in
10accordance with the provisions of the contract, a contractor
11shall pay to the subcontractor, and each subcontractor shall in
12turn pay to its subcontractors, the full or proportional amount
13received for each such subcontractor's work and material, based
14on work completed or services provided under the subcontract,
15[14] five days after receipt of a progress payment. Payment
16shall be made under this section unless it is being withheld
17under section 3934 (relating to withholding of payment for good
18faith claims).

19* * *

20Section 5.  It is the intent of the General Assembly that the
21additions and amendments to 62 Pa.C.S. Ch. 21 shall be enacted
22and enforced in their entirety. Should any portion or provision
23of the amendments or additions to 62 Pa.C.S. Ch. 21 be declared
24unconstitutional, the remaining amendments or additions to 62
25Pa.C.S. Ch. 21 shall remain in effect and be enforceable.

26Section 6.  The provisions of this act are severable. If any
27provision of this act or its application to any person or
28circumstance is held invalid, the invalidity shall not affect
29other provisions or applications of this act which can be given
30effect without the invalid provision or application.

1Section 7.  This act shall take effect in 60 days.