PRINTER'S NO. 217
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
156
Session of
2015
INTRODUCED BY TEPLITZ, BLAKE, KITCHEN, FONTANA, BREWSTER,
HUGHES, YUDICHAK, COSTA, FARNESE, WILLIAMS, WOZNIAK AND
HAYWOOD, JANUARY 26, 2015
REFERRED TO STATE GOVERNMENT, JANUARY 26, 2015
AN ACT
Amending Title 62 (Procurement) of the Pennsylvania Consolidated
Statutes, in small and disadvantaged businesses, further
providing for definitions and for Statewide bonding program
and providing for mentor-protรฉgรฉ program, for Small Business
Reserve Program, for reciprocity of certifications, for
oversight and responsibility and for prime contractors'
performance; in contracts for public works, 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:
ยง 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:
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(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
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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:
ยง 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, 2015, to June 30, 2016, 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:
ยง 2109. Mentor-protรฉgรฉ 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
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awards by partnering with large companies, which shall serve as
mentors, in State contracts.
(b) Consideration.--The mentor-protรฉgรฉ 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-protรฉgรฉ 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.
ยง 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 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
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Program only, bidders shall self-certify that they are qualified
small businesses and verification of status shall be confirmed
by the awarding agency.
ยง 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.
ยง 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
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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,
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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.
ยง 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
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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
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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
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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:
ยง 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.
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Section 7. This act shall take effect in 60 days.
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