1Amending Title 51 (Military Affairs) of the Pennsylvania
2Consolidated Statutes, providing for service-disabled
3veteran-owned business participation goals.

4The General Assembly of the Commonwealth of Pennsylvania
5hereby enacts as follows:

6Section 1. Title 51 of the Pennsylvania Consolidated Statutes
7is amended by adding a chapter to read:

8CHAPTER 72

9SERVICE-DISABLED VETERAN-OWNED BUSINESS

10PARTICIPATION GOALS

11Sec.

127201.  Definitions.

137202.  Service-disabled veteran-owned business participation
14goals.

157203.  Bids for bond services.

167204.  Monitoring.

177205.  Cooperation.

17206.  Reporting requirements.

27207.  Validity of bonds.

37208.  Information required in bid.

47209.  Appointment of State service-disabled veteran-owned
5business coordinator.

67210.  Agency service-disabled veteran-owned business advocates.

7§ 7201.  Definitions.

8The following words and phrases when used in this chapter
9shall have the meanings given to them in this section unless the
10context clearly indicates otherwise:

11"Administering agency."  The State Treasurer, in the case of
12contracts for professional bond services, and the Department of
13General Services, in the case of all other contracts.

14"Awarding department."  A Commonwealth agency, department,
15governmental entity or other officer or entity empowered by law
16to issue bonds or enter into contracts on behalf of the
17Commonwealth, including a school district when it expends
18Commonwealth funds for construction, professional services,
19materials, supplies, equipment, alterations, repairs or
20improvements.

21"Bonds."  Bonds, notes, warrants, certificates of
22participation and other evidences of indebtedness issued by or
23on behalf of the Commonwealth.

24"Commercially useful function."  A person or entity performs
25a commercially useful function if the person or entity does all
26of the following:

27(1)  Is responsible for the execution of a distinct
28element of the work of a contract.

29(2)  Carries out the responsibility by actually
30performing, managing or supervising the work involved.

1(3)  Performs work that is normal for the person's or
2entity's business services and functions.

3(4)  Does not further subcontract a portion of the work
4that is greater than that expected to be subcontracted by
5normal industry practices.

6A contractor, subcontractor or supplier may not be considered to
7perform a commercially useful function if the contractor's,
8subcontractor's or supplier's role is limited to that of an
9extra participant in a transaction, contract or project through
10which funds are passed in order to obtain the appearance of
11service-disabled veteran-owned business participation.

12"Contract."  An agreement to provide professional bond
13services to the Commonwealth or an awarding department. The term
14also includes an agreement to provide labor, services, material,
15supplies or equipment in the performance of a contract,
16franchise, concession or lease granted, let or awarded for and
17on behalf of the Commonwealth.

18"Contractor."  A person or sole proprietorship, partnership,
19joint venture, corporation or combination thereof that submits a
20bid and enters into a contract with a representative of a
21Commonwealth agency, department, governmental entity or other
22officer empowered by law to enter into contracts on behalf of
23the Commonwealth. The term includes a provider of professional
24bond services that enters into a contract with an awarding
25department.

26"Goal."  A numerically expressed objective that an awarding
27department or contractor is required to make efforts to achieve.

28"Management and control."  Effective and demonstrable
29management of a business entity.

30"Service-disabled veteran."  A veteran of the armed forces of

1the United States who has at least a 10% service-related
2disability and who is domiciled in this Commonwealth.

3"Service-disabled veteran-owned business."  A sole
4proprietorship, corporation or partnership certified by an
5administering agency as meeting all of the following
6requirements:

7(1)  Its home office is located in the United States and
8it is not a branch or subsidiary of a foreign corporation,
9foreign firm or other foreign-based business.

10(2)  In the case of a sole proprietorship, not less than
1151% of the business is owned by one or more disabled
12veterans; in the case of a publicly owned business, not less
13than 51% of its stock is owned by one or more disabled
14veterans; in the case of a subsidiary that is wholly owned by
15a parent corporation, not less than 51% of the voting stock
16of the parent corporation is owned by one or more disabled
17veterans; or, in the case of a joint venture, not less than
1851% of the joint venture's management, control and earnings
19are held by one or more disabled veterans. Status as a
20service-disabled veteran-owned business concern shall be
21determined in accordance with 13 CFR Pt. 125 (relating to
22government contracting programs).

23(3)  Daily business operations are managed and controlled
24by one or more disabled veterans. The disabled veterans who
25exercise management and control are not required to be the
26same disabled veterans as the owners of the business.

27Notwithstanding paragraphs (1), (2) and (3), after the death or
28the certification of a permanent medical disability of a
29disabled veteran who is a majority owner of a business that
30qualified as a service-disabled veteran-owned business prior to

1that death or certification and solely for purposes of any
2contract entered into before the death or certification, the
3business shall be deemed to be a service-disabled veteran-owned
4business for a period of not more than three years after the
5date of death or certification of a permanent medical disability
6if the business is inherited or controlled by the spouse or
7child of the majority owner or by both of those persons.

8"Service-disabled veteran-owned business contractor,
9subcontractor or supplier."  A person or entity that has been
10certified by an administering agency under this chapter and that
11performs a commercially useful function in providing services or
12goods that contribute to the fulfillment of contract
13requirements.

14§ 7202.  Service-disabled veteran-owned business participation
15goals.

16(a)  Required goals.--Notwithstanding any other provision of
17law, an awarding department shall have annual Statewide
18participation goals of not less than 5% for service-disabled
19veteran-owned businesses for all contracts entered into by the
20awarding department during the year. The goal shall apply to the
21overall dollar amount expended by the awarding department with
22respect to the contracts.

23(b)  Cocounsel, joint-venture and subcontracting
24relationships.--

25(1)  An awarding department shall support a program for
26assigning representative portions of contracts for the
27purpose of meeting the goals established under subsection
28(a). An awarding department shall consider establishing
29cocounsel, joint-venture and subcontracting relationships
30with service-disabled veteran-owned businesses.

1(2)  Nothing in this chapter may be construed to preclude
2an awarding department from achieving the goals set forth in
3this section without requiring joint ventures, cocounsel or
4subcontracting arrangements.

5§ 7203.  Bids for bond services.

6Notwithstanding the provisions of section 7202 (relating to
7service-disabled veteran-owned business participation goals), if
8a contract for professional bond services is to be obtained by
9competitive bid, the awarding department shall, at a minimum,
10take all of the following actions:

11(1)  Deliver the notice of sale or other notification of
12intention to issue the bonds to all service-disabled veteran-
13owned businesses that have listed their names with the
14awarding department.

15(2)  State in all notices of sale and other notifications
16of intention to issue bonds that service-disabled veteran-
17owned businesses are encouraged to respond.

18(3)  Require all submitting bidders to certify their
19awareness of the goals of the awarding department in
20accordance with this chapter.

21§ 7204.  Monitoring.

22(a)  General rule.--An administering agency and awarding
23department shall establish a method of monitoring achievement of
24the goals specified in section 7202 (relating to service-
25disabled veteran-owned business participation goals).

26(b)  Contractor reporting.--A contractor shall report to the
27administering agency or awarding department upon the completion
28of any sale of bonds.

29(c)  Certain contracts not to be included toward goal.--An
30awarding department shall not credit toward the department's

1goal funds expended on a contract with a service-disabled
2veteran-owned business that does not meet and maintain the
3certification requirements.

4§ 7205.  Cooperation.

5In implementing this chapter, an awarding department shall
6utilize existing resources available through the Department of
7Military and Veterans Affairs, the United States Department of
8Veterans Affairs and the United States Small Business
9Administration.

10§ 7206.  Reporting requirements.

11(a)  Reports of awarding departments.--

12(1)  On July 1 of each year, each awarding department
13shall report to the Governor, the General Assembly, the
14Department of General Services and the Department of Military
15and Veterans Affairs on the participation by service-disabled
16veteran-owned businesses in contracts for the previous fiscal
17year.

18(2)  If an awarding department has not met its
19established goal for the previous fiscal year, the awarding
20department shall identify the reasons for the awarding
21department's shortfall and the steps the awarding department
22will take to achieve its goal.

23(b)  Reports by Department of General Services.--On September
241 of each year, the Department of General Services shall present
25to the Governor, the General Assembly and the Department of
26Veterans Affairs a Statewide statistical summary detailing each
27awarding department's goal achievement and a Statewide total of
28the goals.

29§ 7207.  Validity of bonds.

30(a)  General rule.--Notwithstanding any other provision of

1this chapter to the contrary, no bonds, contracts, notes or
2other obligations issued by an awarding department to provide
3for the payment of any contract subject to this chapter may be
4deemed invalid or unenforceable as a result of the failure of an
5awarding department to meet its goals established under this
6chapter.

7(b)  Actions prohibited.--No action may be maintained to
8enjoin the issuance of any bonds to which this chapter applies
9or the enforcement of any contract for professional bond
10services based on an awarding department's failure to meet the
11goals set forth in section 7202 (relating to service-disabled
12veteran-owned business participation goals).

13§ 7208.  Information required in bid.

14An awarding department taking bids in connection with the
15award of a contract shall provide, in the general conditions
16under which bids will be received, that any person making a bid
17or offer to perform a contract shall, in the bid or offer, state
18the following information:

19(1)  The name and location of the place of business of
20each subcontractor certified as a service-disabled veteran-
21owned business that will perform work or labor or render
22service to the prime contractor in connection with the
23performance of the contract and who will be used by the prime
24contractor to fulfill service-disabled veteran-owned business
25participation goals.

26(2)  The portion of work that will be performed by each
27subcontractor under paragraph (1). Except in cases of
28emergency where a contract is necessary for the immediate
29preservation of the public health, welfare or safety or
30protection of State property, a prime contractor shall list

1only one subcontractor for each portion of work as defined by
2the prime contractor in the bid or offer.

3§ 7209.  Appointment of State service-disabled veteran-owned
4business coordinator.

5The Department of Military and Veterans Affairs shall appoint
6a State service-disabled veteran-owned business coordinator to
7do all of the following:

8(1)  Oversee, promote and coordinate efforts to
9facilitate implementation of this chapter.

10(2)  Disseminate information on this chapter.

11(3)  Coordinate reports under section 7206 (relating to
12reporting requirements).

13(4)  Coordinate with administering agencies and existing
14and potential service-disabled veteran-owned businesses to
15achieve the participation goals set forth under section 7202
16(relating to service-disabled veteran-owned business
17participation goals).

18§ 7210.  Agency service-disabled veteran-owned business
19advocates.

20Each awarding department shall appoint an agency service-
21disabled veteran-owned business advocate. A service-disabled
22veteran-owned business advocate shall do all of the following:

23(1)  Assist certified service-disabled veteran-owned
24businesses in participating in the awarding agency's
25contracting process.

26(2)  Assist contract officers in seeking service-disabled
27veteran-owned businesses to participate in the awarding
28agency's contract and procurement activities.

29(3)  Disseminate information to the awarding agency's
30contract and procurement staff.

1(4)  Serve as an advocate for service-disabled veteran-
2owned businesses that are utilized as the awarding agency's
3contractors and subcontractors.

4(5)  Coordinate with the State service-disabled veteran-
5owned business coordinator to achieve the participation goals
6set forth under section 7202 (relating to service-disabled
7veteran-owned business participation goals).

8Section 2.  The Department of Military and Veterans Affairs
9may promulgate rules and regulations to administer this act.

10Section 3.  This act shall apply to contracts entered into on
11or after January 1, 2014.

12Section 4.  This act shall take effect in 60 days.