THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY WASHINGTON, COSTA, FONTANA, KITCHEN AND WOZNIAK, MARCH 22, 2011

REFERRED TO STATE GOVERNMENT, MARCH 22, 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, 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:

"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.

"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 with up to $45,000,000

in gross revenue. The department shall have the authority to

review the employee limit and gross revenue threshold 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 of Title 62 is amended by adding a

subsection to read:

§ 2105.  Bonding and progress payments.

* * *

(a.1)  Statewide bonding 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 based on best practices.

* * *

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

§ 2109.  Mentor-protégé program.

(a)  Establishment.--All Commonwealth agencies, independent

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

boards, commissions, colleges and universities shall adopt and

institute, with the department's assistance, a mentor-protégé 

program to assist, support and enable small businesses and

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 small business or disadvantaged business

shall be an important factor to be considered by the agency,

board, commission, college or university in the award of any

Commonwealth contract or award.

(c)  Guidelines.--The department shall establish guidelines  

for participation in a mentor-protégé program.

§ 2110.  Small business reserve.

(a)  General rule.--All Commonwealth agencies, independent

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

boards, commissions, colleges and universities shall establish a

small business reserve for the purpose of increasing economic

opportunities for small businesses and affording small

businesses, including disadvantaged businesses, the opportunity

to bid on State government contracts without competing with

larger businesses.

(b)  Amount.--Pursuant to section 2101 (relating to policy),

all Commonwealth agencies, boards, commissions, colleges and

universities shall place 10% of its moneys available for

procurement into its small business reserve for award to

qualified small businesses. The amount set aside shall be a

minimum of $25,000 up to a maximum $5,000,000.

(c)  Self-certification.--Bidders shall self-certify that

they are qualified small businesses and verification of status

shall be confirmed by the awarding agency, board or commission

prior to award.

(d)  Tier categories.--The small business reserve shall be

categorized in the following tiers:

(1)  Tier 1: 0 to 100 employees with gross revenues not

exceeding $25,000,000. All small businesses in this tier may

bid on any small business reserve contract.

(2)  Tier 2: 101 to 200 employees with gross revenues not

exceeding $35,000,000. Small businesses in this tier may only

compete for contracts $100,000 and greater.

(3)  Tier 3: 201 to 250 employees with gross revenues not

exceeding $45,000,000. Small businesses in this tier may only

compete for contracts $250,000 and greater.

§ 2111.  Reciprocity of certifications.

(a)  General rule.--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.

(b)  Diversity program.--Any governmental or public entity,

including colleges and universities, receiving Commonwealth

funds of any amount shall be required to implement a minority-

owned business, women-owned business or disadvantaged business

enterprise diversity program that is subject to review by the

department. If a governmental or public entity, including

colleges and universities, does not have a minority-owned

business, women-owned business or disadvantaged business

enterprise program, the Commonwealth's program under the Bureau

of Minority and Women Business Opportunities within the

department shall be applied to any contract, grant or project

funded with State dollars to ensure compliance with all

requirements.

§ 2112.  Oversight and responsibility.

(a)  General rule.--All Commonwealth agencies, independent

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

boards, commissions, colleges and universities shall identify

best practices to significantly increase contracting

opportunities for disadvantaged businesses. All agencies, boards

and commissions issuing and awarding contracts or grant funding

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.--All Commonwealth agencies,

independent agencies, State-affiliated agencies, quasi-

independent agencies, boards, commissions, colleges and

universities 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.--Best practices shall include the

following 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 a

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 bureau 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.  Appropriations are as follows:

(1)  The sum of $5,000,000, or as much thereof as may be

necessary, is hereby appropriated to the Department of

General Services for the fiscal year July 1, 2011, to June

30, 2012, to carry out the purposes of 62 Pa.C.S. § 2105(a.1)

(2)  The sum of $1,000,000, or as much thereof as may be

necessary, is hereby appropriated to the Department of

General Services for the fiscal year July 1, 2011, to June

30, 2012, to obtain customized software programing for

tracking and reporting on disadvantaged business

participation in Commonwealth contracts and grants under 62

Pa.C.S. § 2112.

Section 6.  This act shall take effect in 60 days.