PRINTER'S NO. 2979
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2053
Session of
2018
INTRODUCED BY WHEATLEY, FEBRUARY 2, 2018
REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 2, 2018
AN ACT
Amending Title 62 (Procurement) of the Pennsylvania Consolidated
Statutes, in small and disadvantaged businesses, further
providing for definitions, providing for authority to waive
employee limit, for alternative certification, for contractor
performance and general conditions, for mentor-protégé
program and for small business reserve program; establishing
the Surety Bond Guarantee Program and the Surety Bond
Guarantee Fund; and, in contracts for public works, further
providing for contractors' and subcontractors' payment
obligations.
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] Notwithstanding section 103 (relating to
definitions) and 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."
(1) The term includes an office, department, authority,
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board, multistate agency or commission of the executive
branch, including:
(i) The Governor's Office.
(ii) The Office of Attorney General, the Department
of the Auditor General and the Treasury Department.
(iii) 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 does not include a legislative agency or
judicial agency.
"Disadvantaged business." A small business which is owned or
controlled by a majority of persons, not limited to members of
minority groups, who:
(1) have been deprived of the opportunity to develop and
maintain a competitive position in the economy because of
social disadvantages[.]; or
(2) are veterans, including service-disabled veterans.
"Governmental agency." A Commonwealth agency, local agency,
independent agency, State-affiliated entity or State-related
institution. The term does not include a local library, county
library, library system, district library center or Statewide
library resource center under 24 Pa.C.S. Ch. 93 (relating to
public library code) or a nonprofit organization that performs
or is intended to perform an essential governmental function.
"Independent agency." A 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 does not
include a legislative agency or judicial agency.
"Judicial agency." A court of the Commonwealth or other
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entity or office of the unified judicial system.
"Legislative agency." Any of the following:
(1) The Senate.
(2) The House of Representatives.
(3) The Capitol Preservation Committee.
(4) The Center for Rural Pennsylvania.
(5) The Joint Legislative Air and Water Pollution
Control and Conservation Committee.
(6) The Joint State Government Commission.
(7) The Legislative Budget and Finance Committee.
(8) The Legislative Data Processing Committee.
(9) The Independent Regulatory Review Commission.
(10) The Legislative Reference Bureau.
(11) The Local Government Commission.
(12) The Pennsylvania Commission on Sentencing.
(13) The Legislative Reapportionment Commission.
(14) The Independent Fiscal Office.
(15) The Legislative Audit Advisory Commission.
(16) Another office, commission, committee or agency of
the General Assembly, or a caucus of that office, commission,
committee or agency, whose general operation is funded
separately through a General Fund appropriation.
"Local agency." Any of the following:
(1) A political subdivision, intermediate unit, charter
school, cyber charter school or public trade or vocational
school.
(2) A local, intergovernmental, regional or municipal
agency, authority, council, board, commission or similar
governmental entity.
"Service-disabled veteran." A veteran who possesses either
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an adjudication letter from the United States Department of
Veterans Affairs establishing a service-connected disability
rating or a disability determination from the United States
Department of Defense.
"Small business." A business in the United States which is
independently owned, is not dominant in its field of operation
and employs 100 or fewer employees.
"State-affiliated entity." A Commonwealth authority or
Commonwealth entity. The term includes the Pennsylvania Higher
Education Assistance Agency and any entity established by that
agency, the Pennsylvania Gaming Control Board, the Pennsylvania
Game Commission, the Pennsylvania Fish and Boat Commission, the
Pennsylvania Housing Finance Agency, the Pennsylvania Municipal
Retirement Board, the State System of Higher Education, a
community college, the Pennsylvania Turnpike Commission, the
Pennsylvania Public Utility Commission, the Pennsylvania
Infrastructure Investment Authority, the State Public School
Building Authority, the Pennsylvania Interscholastic Athletic
Association, the Pennsylvania Higher Educational Facilities
Authority and a State-related institution.
"State-related institution." Includes:
(1) Temple University.
(2) The University of Pittsburgh.
(3) The Pennsylvania State University.
(4) Lincoln University.
"Veteran." An individual who:
(1) served in the active United States Armed Forces in
any of the four current branches and all previous branches,
including a reserve component or the National Guard;
(2) was released or discharged from active military
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service under conditions other than dishonorable; and
(3) possesses a certificate of release or discharge from
active duty.
Section 2. Title 62 is amended by adding sections to read:
§ 2104.1. Authority to waive employee limit.
(a) Authority to waive.--The department or a Commonwealth
agency may, at its discretion and where it is determined to be
in the best interest of the Commonwealth, waive the small
business employee limit requirement as established in the
definition of small business in section 2102 (relating to
definitions) in order to promote and create economic
opportunities for disadvantaged businesses.
(b) Inclusion of employee limit in bid document.--The
department or a Commonwealth agency shall inform prospective
bidders of the decision to waive the small business employee
limit for disadvantaged businesses by including notice of the
waiver in the invitation for bid, request for proposal or other
document that is subject to an employee limit waiver, prior to
its release for bidding or solicitation purposes by the
department or a Commonwealth agency.
(c) Subsequent determination to waive notice.--If the
department or a Commonwealth agency determines that the small
business employee limit should be waived subsequent to the
release of an invitation for bid, request for proposal or other
document, the department or the Commonwealth agency shall take
appropriate action to ensure the inclusion of disadvantaged
businesses in bidding requirements or solicitation of proposals
and provide prompt notice to all prospective bidders and
offerors of the determination to waive the small business
employee limit.
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(d) Report.--The department shall include in its annual
report to the General Assembly information on its use of the
small business employee limit waiver authorized under this
section. The report shall include, but may not be limited to,
the following information for the preceding calendar year:
(1) The number of times the employee limit was waived
prior to the release of an invitation for bid, request for
proposal or other document and the reason for imposing the
waiver.
(2) The number of times the employee limit was waived
following the release of an invitation for bid, request for
proposal or other document and the reason for the subsequent
determination to waive the small business employee limit
requirement.
(3) The identity and geographic location of the
disadvantaged businesses subject to an employee limit waiver.
(4) The number of employees of each disadvantaged
business subject to an employee limit waiver.
(5) The dollar amount of each contract awarded which
included a small business employee limit waiver.
(e) Applicability.--The provisions of this section shall
apply to any eligible disadvantaged business.
§ 2109. Alternative certification.
(a) Acceptance of alternative certification authorized.--
(1) Subject to the provisions of paragraph (2), to
establish greater uniformity in the Commonwealth's
disadvantaged business certification process, the department
may accept the certification of an eligible disadvantaged
business certified under the Pennsylvania Unified
Certification Program as established by the department in
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accordance with the requirements of 49 CFR Parts 23 (relating
to participation of disadvantaged business enterprise in
airport concessions) and 26 (relating to participation by
disadvantaged business enterprises in Department of
Transportation financial assistance programs).
(2) The department may not certify or accept a
certification from an owner of a disadvantaged business who
is not a citizen or lawful permanent resident of the United
States.
(b) Reciprocity.--Notwithstanding any provision of law,
regulation, guideline or policy statement to the contrary, the
certification of a disadvantaged business enterprise by the
department in accordance with subsection (a) shall be accepted
and used by a governmental agency as adequate certification for
the purpose of bidding on or participating in any public bid,
contract or award, the execution of which involves the use of
Commonwealth funds.
(c) Disadvantaged business utilization program.--
(1) Each governmental agency receiving Commonwealth
funds may establish a disadvantaged business utilization
program which encourages the participation and use of
disadvantaged businesses in the performance of Commonwealth-
funded contracts.
(2) A governmental agency that fails to establish a
disadvantaged business utilization program in accordance with
paragraph (1) shall adopt and implement the program
established by the department.
(d) Adoption of procurement practices.--
(1) The department shall provide assistance to the
Auditor General, the State Treasurer, the Attorney General
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and appropriate officers in the legislative agencies and
judicial agencies to develop best procurement practices
specific to the constitutional and statutory functions of
each office and agency and consistent with the provisions of
this title and regulations related to procurement by
disadvantaged businesses.
(2) To facilitate participation by disadvantaged
businesses in procurement by constitutional offices and the
legislative agencies and judicial agencies, the
constitutional officers and purchasing agents of a
legislative agency or judicial agency may adopt the
procurement practices and utilization program used by the
department to promote participation by disadvantaged
businesses in contracting, subcontracting and purchasing.
§ 2110. Contractor performance and general conditions.
(a) Mandatory provisions.--Each Commonwealth agency taking
bids in connection with the award of a contract shall provide,
in the general conditions under which a bid will be received,
that a person making a bid as a prime contractor shall, in the
bid or offer, specify the following information:
(1) The name and business address of the place of
business of each subcontractor certified as a disadvantaged
business that will perform work or labor or render service to
the prime contractor in connection with the performance of
the contract and that will be used by the prime contractor to
fulfill disadvantaged business participation goals.
(2) The portion of the contract that will be performed
by each subcontractor under paragraph (1), except that, in
the case of an emergency where a contract is necessary and
essential for the immediate preservation of the public
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health, welfare or safety or the protection of State
property, the prime contractor shall list only one
subcontractor for each portion of the contract as defined by
the prime contractor in the bid or offer.
(3) A statement of the efforts made to negotiate with
disadvantaged businesses, including the name, address and
telephone number of any disadvantaged business contacted by
the prime contractor, along with the date the negotiations
took place, if any, and a description of the information
provided to the disadvantaged businesses regarding the plans,
specifications and requirements for the portion of the
contract proposed to be performed by the disadvantaged
business.
(b) Discretionary provisions.--The bid or offer under
subsection (a) may also specify any of the following
information:
(1) Whether the person or a representative of the person
attended a prebid or preproposal conference.
(2) A copy of written notification of the bid or offer
to perform a contract sent by certified mail, return receipt
requested, or e-mail, read receipt, to disadvantaged
businesses that perform the type of work to be subcontracted
in sufficient time to allow the disadvantaged businesses to
participate effectively.
(3) The specific work the person intends to subcontract,
that 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 invitation for
bids or requests for proposals.
(4) A statement of whether economically feasible
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portions of the contract will be performed by disadvantaged
businesses, including, where appropriate, segmenting or
combining elements of a contract into economically feasible
units.
(5) Information on whether the person or a
representative of the person consulted with the Bureau of
Minority and Women Business Opportunities to ensure
significant contracting, subcontracting and purchasing
opportunities for disadvantaged businesses.
(6) Information on whether the person or a
representative of the person participated in outreach
activities or events to increase disadvantaged business
interest and participation in contracting, subcontracting and
purchasing opportunities.
(7) Information on use of the department's publicly
accessible Internet website to identify certified
disadvantaged businesses as prospects for contracting,
subcontracting and purchasing opportunities in connection
with a bid or offer.
(8) A solicitation of certified disadvantaged businesses
for contracting, subcontracting or purchasing opportunities
and inclusion of certified disadvantaged businesses on
solicitation lists.
(9) Records of solicitations, including a bid
tabulation, showing the names of all disadvantaged businesses
solicited and the dollar amount of the bid, quote or
proposal, as well as copies of all bids, quotes and proposals
received.
(10) Quarterly reports or other reports provided to the
Bureau of Minority and Women Business Opportunities depicting
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disadvantaged business utilization.
(11) Evidence demonstrating good faith effort in the
oversight of and timely payment to, as provided under
Subchapter D of Chapter 39 (relating to prompt payment
schedules), disadvantaged businesses and to maintain the
commitment made to a disadvantaged business that served as a
subcontractor at the time the subcontract was awarded and
after that time.
§ 2111. Mentor-protégé program.
(a) Establishment and purpose of program.--
(1) The department shall establish a mentor-protégé
program to assist disadvantaged businesses in enhancing their
capabilities to compete for and perform prime contracts and
subcontracts awarded by a Commonwealth agency.
(2) The purpose of the mentor-protégé program is to
foster long-term business relationships between disadvantaged
businesses and prime contractors in order to facilitate
growth and development of disadvantaged businesses and
increase prime contracting and subcontracting opportunities
for disadvantaged businesses with Commonwealth agencies.
(b) Agreement required.--A prime contractor that is approved
as a mentor by the department may enter into a written agreement
with a disadvantaged business to provide developmental
assistance to enhance the disadvantaged business's contracting
and subcontracting capabilities. Developmental assistance
provided by a mentor prime contractor to its protégé
disadvantaged business may include, but not be limited to, the
following:
(1) Management assistance, including financial
management, organizational management, business management
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and planning and business development.
(2) Technical assistance.
(3) Financial assistance.
(4) Temporary employee assistance.
(5) Use of facilities, equipment or property without
charge.
(6) Any other type of developmental assistance as
approved by the department.
(c) Factor to be considered.--Notwithstanding any other
provision of this title to the contrary, the mentor-protégé
arrangement between a prime contractor and a disadvantaged
business whereby the disadvantaged business serves as a joint
venture partner or subcontractor to the prime contractor shall
be an important factor to be considered or weighed by a
Commonwealth agency in awarding a contract under sections 513
(relating to competitive sealed proposals), 517 (relating to
multiple awards), 518 (relating to competitive selection
procedures for certain services) and 519 (relating to selection
procedure for insurance and notary bonds).
(d) Guidelines.--The department shall adopt and publish
guidelines to enforce and carry out the requirements of this
section. The guidelines shall be published in the Pennsylvania
Bulletin and shall include, but may not be limited to, the
following:
(1) Selection criteria for mentor and protégé
businesses.
(2) An application process, including an application
form to be used by prime contractors seeking to participate
in the mentor-protégé program and the time frame for review.
(3) Criteria for measuring program impact and success.
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(4) The required contents of a mentor-protégé written
agreement. Each written agreement shall specify the type of
developmental assistance that will be provided by the mentor
to the protégé disadvantaged business.
§ 2112. Small business reserve program.
(a) Small business reserve.--The department shall establish
a small business reserve program for the purpose of increasing
economic opportunities for small and disadvantaged businesses
and affording small and disadvantaged businesses the opportunity
to bid on State government contracts without competing with
larger businesses. All procurement by the department shall be
eligible for designation for the small business reserve program
and shall be published in the same manner as required for a
request for proposal or an invitation for bid.
(b) Reserved amount of procurement contracts.--
(1) Notwithstanding any other provision of this title to
the contrary, 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 and professional services and designed
professional services contracts, to be made directly to
qualified small and disadvantaged businesses.
(2) The total dollar value of procurements by the
department may not include the value of any contract to which
this subsection would not apply because of a conflict with
Federal law.
(c) Awards.--The department shall award a procurement
contract designated for a small business reserve to the small
and disadvantaged business that submits a bid or proposal that:
(1) is the lowest bid price;
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(2) is the lowest evaluated bid price, if the invitation
for bid or request for proposal so provides; or
(3) is in the best interest of the Commonwealth.
(d) Other Commonwealth agencies.--
(1) A Commonwealth agency may collaborate with the
department to structure its procurement procedures to provide
for a small business reserve program which shall be subject
to the requirements of this section.
(2) Upon request, the department shall assist the
procurement unit of a Commonwealth agency with the
development and implementation of a small business reserve.
(e) Construction and application.--
(1) The provisions of this section shall not be
construed to preclude any small and disadvantaged business
from competing for any other contract that is not
specifically designated for the small business reserve
program.
(2) The provisions of this section shall apply to any
eligible small business as defined under section 2102
(relating to definitions).
(f) Regulations.--The department shall adopt and promulgate
regulations to govern the provisions of this section. The
regulations shall:
(1) Establish a comprehensive bidder's list of eligible
small and disadvantaged businesses.
(2) Provide procedures for maintaining the list in
paragraph (1).
(3) Include any other information the department
determines necessary and appropriate to carry out the
provisions of this section.
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(g) Reports.--On or before December 31, 2019, and on or
before each December 31 thereafter, the department shall submit
a report to the Chief Clerk of the Senate and the Chief Clerk of
the House of Representatives on the operation and effectiveness
of the small business reserve program. The department may submit
the report electronically. The report shall include the
following:
(1) The total number and dollar value of payments that
the department made to small and disadvantaged businesses
pursuant to designated small business reserve contracts.
(2) The total number and dollar value of payments that
the department made to small and disadvantaged businesses
that were not designated as small business reserve contracts.
(3) The total dollar value of payments made by the
department under procurement contracts.
(4) Information on any Commonwealth agency that has
implemented a small business reserve program, including
information required under paragraphs (1), (2) and (3).
(5) Any other information or recommendations the
department determines necessary.
Section 3. Title 62 is amended by adding a chapter to read:
CHAPTER 21A
SURETY BOND GUARANTEE PROGRAM
Sec.
21A01. Definitions.
21A02. Establishment of program.
21A03. Surety Bond Guarantee Fund.
21A04. Contract eligible for guarantee.
21A05. Disadvantaged business participation.
21A06. Criteria for denying program participation.
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21A07. Duties of department.
21A08. Regulations.
§ 21A01. Definitions.
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:
"Applicant." A disadvantaged business as defined in this
chapter.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"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. The term includes a small
business which is owned or controlled by a majority of persons
who are veterans, including service-disabled veterans.
"Fund." The Surety Bond Guarantee Fund established in
section 21A03 (relating to Surety Bond Guarantee Fund).
"Program." The Surety Bond Guarantee Fund Program
established in this chapter.
"Secretary." The Secretary of Community and Economic
Development of the Commonwealth.
"Service-disabled veteran." A veteran who possesses either
an adjudication letter from the United States Department of
Veterans Affairs establishing a service-connected disability
rating or a disability determination from the United States
Department of Defense.
"Small business." A business in the United States which is
independently owned, is not dominant in its field of operation
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and employs 100 or fewer employees.
"Surety bond." A guarantee in which the surety guarantees
that the contractor or principal in the bond will perform the
obligation stated in the bond. The term includes the following
types of bonds:
(1) Bid bonds that guarantee the bidder will enter into
a contract and furnish the required payment and performance
bonds.
(2) Payment bonds that guarantee payment from the
contractor to parties who furnish labor, materials, equipment
and supplies.
(3) Performance bonds that guarantee the contractor will
fulfill the contract in accordance with terms and conditions.
(4) Ancillary bonds which may be incidental and
essential to the performance of the contract.
"Veteran." An individual who:
(1) served in the active United States Armed Forces in
any of the four current branches and all previous branches,
including a reserve component or the National Guard;
(2) was released or discharged from active military
service under conditions other than dishonorable; and
(3) possesses a certificate of release or discharge from
active duty.
§ 21A02. Establishment of program.
The Surety Bond Guarantee Fund Program is established, to the
extent that funds are appropriated specifically for the purposes
of this chapter, in the department. The purpose of the program
is to assist disadvantaged businesses to competitively bid for
governmental contracts.
§ 21A03. Surety Bond Guarantee Fund.
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(a) Fund established.--The Surety Bond Guarantee Fund is
established within the State Treasury for the purpose of
assisting disadvantaged businesses to competitively bid for
certain Commonwealth contracts.
(b) Fund administration.--Money 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.
(c) Payments from fund.--The Surety bond guarantees made
with payments from the fund under the program shall not exceed
the sum of $1,000,000 for any one disadvantaged business.
§ 21A04. Contract eligible for guarantee.
(a) Eligibility.--A bond guaranteeing the performance of a
contract or project shall be qualified and eligible for a surety
bond guarantee under the program if the bond:
(1) is listed in the contract bonds section of the
Surety & Fidelity Association of America's "Manual of Rules,
Procedures and Classifications";
(2) is required by the contract, invitation for bid or
request for proposal;
(3) is executed by a surety company that is acceptable
to the Treasury Department and qualified by the department;
and
(4) meets other requirements established by the
department.
(b) Required provision and notice of cancellation.--
(1) No bond shall qualify or be eligible for a guarantee
under the program unless it contains a provision affirming
that the bond shall not be canceled for any cause unless
notice of intention to cancel is given to the department at
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least 30 days before the day upon which cancellation shall
take effect.
(2) Cancellation of the bond shall not invalidate the
bond regarding the period of time it was in effect.
§ 21A05. Disadvantaged business participation.
(a) Application process.--
(1) A disadvantaged business may apply to participate in
the program by filing an application with the department.
(2) The department shall review the application to
determine if the applicant is eligible to participate in the
program within 30 days of receipt of the completed
application. The department may extend the review period for
an additional 30 days if it determines that additional time
is needed to complete the review process.
(3) The department shall notify the applicant in writing
of the extended period, including the date that the
department will reach its final decision.
(b) Investigation.--
(1) Upon receipt of a completed application, the
department may conduct an investigation of the applicant,
including an investigation of its owners, officers,
directors, principals or agents, in order to determine
whether the applicant is eligible to participate in the
program.
(2) If the investigation finds and the department
determines that an applicant is not eligible to participate
in the program, the department shall notify the applicant in
writing that the applicant will not be approved for program
participation.
(3) The notification of ineligibility shall include the
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reason the application was not approved and that the
applicant has the right to appeal the department's
determination to the secretary within 30 days of the date of
the notice.
(c) Criteria for determining eligibility.--An applicant
shall be deemed eligible to participate in the program if the
department determines that the applicant meets all of the
following qualifications:
(1) The applicant is a disadvantaged business certified
by the Department of General Services.
(2) The applicant is in the construction or building
trade industry.
(3) The applicant has been actively operating its
business for at least one year prior to the application date.
(4) The applicant has the experience and financial
fitness appropriate to a qualified contract.
(5) The applicant has agreed to subcontract no more than
75% of the work to be performed under a qualified contract or
project.
(6) The applicant has demonstrated an inability to
secure bonding under normal market conditions.
(7) The applicant or one of its owners, officers,
directors, principals or agents has not committed or been
convicted of any of the activities set forth in section 21A06
(relating to criteria for denying program participation).
(8) The applicant meets any other program requirements
that establish criteria for eligibility that the department
shall adopt by regulation, guideline or statement of policy
within 180 days of the effective date of this paragraph.
§ 21A06. Criteria for denying program participation.
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The department may not approve an application for program
participation if it determines that any of the following applies
regarding the applicant or one of its owners, officers,
directors, principals or agents:
(1) The person committed or has been convicted of any of
the following:
(i) Making a material misstatement in the
application or another document required to be submitted
to the department under a provision of this chapter or to
the Department of General Services under the provisions
of this title.
(ii) Failing to comply with or violating a provision
of this chapter or a regulation, order or statement of
policy issued by the department under this chapter or a
regulation, an order or a statement of policy issued by
the Department of General Services under this title.
(iii) Engaging in unfair or unethical conduct in
connection with the construction or building trade
industry or in violation of Chapter 23 (relating to
ethics in public contracting).
(iv) Notwithstanding any other provision of law to
the contrary, being convicted of or pleading guilty or
nolo contendere to a crime of moral turpitude or to an
offense graded as a felony.
(2) Any of the following applies to the person:
(i) Does not possess the financial fitness,
character, reputation, integrity and general fitness
sufficient to warrant reasonable belief that the
applicant's business will be conducted lawfully, honestly
and in the public interest.
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(ii) Has been enjoined by a court of competent
jurisdiction from engaging in the construction or
building trade industry.
(iii) Has had a license issued by the department or
any other Federal, State or local agency denied, not
renewed, suspended or revoked.
(iv) Has had the certification as a disadvantaged
business issued by the Department of General Services
revoked.
(v) Becomes the subject of a United States Postal
Service fraud order.
(vi) Demonstrates negligence or incompetence in
performing an act under a license required under a law of
this Commonwealth or fails to perform a required duty
under that license.
(vii) Has an outstanding debt to the Federal
Government, the Commonwealth or a Federal or Commonwealth
agency or a political subdivision of the Commonwealth or
agency of a political subdivision.
(viii) Becomes insolvent at any time prior to the
application date. For purposes of this paragraph,
"insolvent" means that the liabilities of the applicant
exceeded the assets of the applicant or that the
applicant could not meet the obligations of the applicant
as they matured or was in such financial condition that
the applicant could not continue in business without
jeopardizing the health, safety and welfare of its
customers and employees.
(ix) At any time prior to application, has failed to
disburse payments to subcontractors in a timely manner as
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agreed to under a contract for a reason other than the
owner's failure to make the agreed-to payments to the
applicant or because the disbursement would constitute a
violation of applicable law or an order issued by a court
or administrative body of competent jurisdiction.
§ 21A07. Duties of department.
(a) Technical assistance.--The department, in consultation
with the Department of General Services, shall provide technical
assistance to enable disadvantaged businesses to competitively
bid on State and other governmental contracts. Technical
assistance shall include, but not be limited to, assisting
disadvantaged businesses in responding to bid requests,
strengthening financial condition and addressing other concerns
raised or likely to be raised by a bonding company.
(b) Monitoring program.--
(1) The department shall establish a monitoring program
to monitor the activities of disadvantaged businesses
participating in the program. The monitoring program shall
include inspections of projects approved for bond guarantees
to minimize the risk of calls on the fund. The department
shall promptly advise the disadvantaged business of any
deficiencies identified during an inspection.
(2) If the deficiencies noted in the report are not
promptly addressed by the disadvantaged business to the
satisfaction of the department, the department may give the
disadvantaged business a reasonable period to correct the
deficiencies or may report the deficiencies to the issuing
bond company.
§ 21A08. Regulations.
(a) Adoption of regulations.--The department shall
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administer and enforce the provisions of this chapter and shall
adopt and promulgate regulations, guidelines or policy
statements necessary to carry out the provisions of this
chapter.
(b) Department of General Services.--The department shall
consult or collaborate with the Department of General Services
to carry out the provisions of this chapter. The Department of
General Services shall from time to time provide technical or
staff assistance as may be required to assist the department in
carrying out the provisions of this chapter.
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] seven 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. If funds are appropriated for the program
established in 62 Pa.C.S. § 21A02(a), the Department of
Community and Economic Development shall publish a notice in the
Pennsylvania Bulletin stating that fact.
Section 6. This act shall take effect as follows:
(1) The following provisions shall take effect
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immediately:
(i) This section and section 5 of this act.
(ii) The amendment of 62 Pa.C.S. § 3933(c).
(2) The addition of 62 Pa.C.S. Ch. 21A shall take effect
upon publication of the notice as provided in section 5 of
this act.
(3) The remainder of this act shall take effect in 60
days.
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