PRINTER'S NO. 301
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY WHEATLEY, BROWNLEE, YOUNGBLOOD, FRANKEL, KORTZ, V. BROWN, FABRIZIO, GOODMAN, READSHAW, BISHOP, CALTAGIRONE, MATZIE AND MCCARTER, JANUARY 23, 2013
REFERRED TO COMMITEE ON LOCAL GOVERNMENT, JANUARY 23, 2013
1Amending Title 62 (Procurement) of the Pennsylvania Consolidated
2Statutes, further providing for definitions; providing for
3authority to waive employee limit, for alternative
4certification, for contractor performance and general
5conditions, for mentor-protégé program and for small business
6reserve program; establishing a surety bond guarantee
7program; and further providing for contractors' and
8subcontractors' payment obligations.
13§ 2102. Definitions.
14[Subject] Notwithstanding section 103 (relating to
15definitions) and subject to section 2103 (relating to
16regulations), the following words and phrases when used in this
17chapter shall have the meanings given to them in this section
18unless the context clearly indicates otherwise:
19"Commonwealth agency." The term shall include the following:
20(1) Any office, department, authority, board, multistate
1agency or commission of the executive branch, including:
2(i) The Office of the Governor.
17(2) are veterans, including service-disabled veterans.
18"Governmental agency." A Commonwealth agency, local agency,
19independent agency, State-affiliated entity or State-related
20institution. The term shall not include any local library,
21county library, library system, district library center or
22Statewide library resource center as those terms are defined in
2324 Pa.C.S. § 9302 (relating to definitions), or to any nonprofit
24organization that performs or is intended to perform an
25essential governmental function.
26"Independent agency." Any board, commission or other agency
27or officer of the Commonwealth that is not subject to the policy
28supervision and control of the Governor. The term shall not
29include a legislative agency or a judicial agency.
30"Judicial agency." A court of the Commonwealth or any other
1entity or office of the unified judicial system.
2"Legislative agency." Any of the following:
3(1) The Senate.
4(2) The House of Representatives.
5(3) The Capitol Preservation Committee.
6(4) The Center for Rural Pennsylvania.
9(6) The Joint State Government Commission.
10(7) The Legislative Budget and Finance Committee.
11(8) The Legislative Data Processing Committee.
12(9) The Independent Regulatory Review Commission.
13(10) The Legislative Reference Bureau.
14(11) The Local Government Commission.
15(12) The Pennsylvania Commission on Sentencing.
16(13) The Legislative Reapportionment Commission.
17(14) The Independent Fiscal Office.
18(15) The Legislative Audit Advisory Commission.
23"Local agency." Any of the following:
30"Service-disabled veteran." A veteran who possesses either
8"State-affiliated entity." A Commonwealth authority or
9Commonwealth entity. The term includes the Pennsylvania Higher
10Education Assistance Agency and any entity established thereby,
11the Pennsylvania Gaming Control Board, the Pennsylvania Game
12Commission, the Pennsylvania Fish and Boat Commission, the
13Pennsylvania Housing Finance Agency, the Pennsylvania Municipal
14Retirement Board, the State System of Higher Education, a
15community college, the Pennsylvania Turnpike Commission, the
16Pennsylvania Public Utility Commission, the Pennsylvania
17Infrastructure Investment Authority, the State Public School
18Building Authority, the Pennsylvania Interscholastic Athletic
19Association and the Pennsylvania Higher Educational Facilities
20Authority. The term shall include a State-related institution.
21"State-related institution." Includes:
22(1) Temple University.
23(2) The University of Pittsburgh.
24(3) The Pennsylvania State University.
25(4) Lincoln University.
26"Veteran." An individual who:
30(2) Was released or discharged from active military
1service under conditions other than dishonorable.
4Section 2. Title 62 is amended by adding sections to read:
5§ 2104.1. Authority to waive employee limit.
6(a) Authority to waive.--The department or a Commonwealth
7agency may, at its discretion and where it is determined to be
8in the best interest of this Commonwealth, waive the small
9business employee limit requirement as established in the
10definition of "small business" in section 2102 (relating to
11definitions) in order to promote and create economic
12opportunities for disadvantaged businesses.
13(b) Inclusion of employee limit in bid document.--The
14department or a Commonwealth agency shall inform prospective
15bidders of the decision to waive the small business employee
16limit for disadvantaged businesses by including notice of the
17waiver in the invitation for bid, request for proposal or any
18other document that is subject to an employee limit waiver,
19prior to its release for bidding or solicitation purposes by the
20department or a Commonwealth agency.
21(c) Subsequent determination to waive notice.--If the
22department or a Commonwealth agency determines that the small
23business employee limit should be waived subsequent to the
24release of an invitation for bid, request for proposal or any
25other such document, the department or Commonwealth agency shall
26take appropriate action to ensure the inclusion of disadvantaged
27businesses in bidding requirements or solicitation of proposals
28and provide prompt notice to all prospective bidders and
29offerors of the determination to waive the small business
1(d) Report.--The department shall include in its annual
2report to the General Assembly information on its use of the
3small business employee limit waiver authorized under this
4section. The report shall include, but may not be limited to,
5the following information for the preceding calendar year:
10(2) The number of times the employee limit was waived
11following the release of an invitation for bid, request for
12proposal or other document and the reason for the subsequent
13determination to waive the small business employee limit
24§ 2109. Alternative certification.
25(a) Acceptance of alternative certification authorized.--To
26establish greater uniformity in the Commonwealth's disadvantaged
27business certification process, the department may accept the
28certification of any eligible disadvantaged business certified
29under the Pennsylvania Unified Certification Program as
30established by the department in accordance with the
1requirements of 49 CFR Subtitle Pts. 23 (relating to
2participation of disadvantaged business enterprise in airport
3concessions) and 26 (relating to participation by disadvantaged
4business enterprises in Department of Transportation financial
5assistance programs). However, the department shall not certify
6or accept any certification from an owner of a disadvantaged
7business who is not a citizen or lawful permanent resident of
8the United States.
9(b) Reciprocity.--Notwithstanding any provision of law,
10regulation, guideline or policy statement to the contrary, the
11certification of any disadvantaged business enterprise by the
12department in accordance with subsection (a) shall be accepted
13and used by a governmental agency as adequate certification for
14the purpose of bidding on or participating in any public bid,
15contract or award, the execution of which involves the use of
17(c) Disadvantaged business utilization program.--
18(1) Each governmental agency receiving Commonwealth
19funds may establish a disadvantaged business utilization
20program which encourages the participation and use of
21disadvantaged businesses in the performance of Commonwealth-
23(2) A governmental agency that fails to establish a
24disadvantaged business utilization program in accordance with
25paragraph (1) shall adopt and implement the program
26established by the department.
27(d) Adoption of procurement practices.--The department shall
28provide assistance to the Auditor General, the State Treasurer,
29the Attorney General and appropriate officers in the legislative
30and judicial agencies to develop best procurement practices
1specific to the constitutional and statutory functions of each
2office and agency and consistent with the provisions of this
3title and regulations related to procurement by disadvantaged
4businesses. To facilitate participation by disadvantaged
5businesses in procurement by constitutional offices and the
6judicial and legislative agencies, such constitutional officers
7and purchasing agents of any judicial agency or legislative
8agency may adopt the procurement practices and utilization
9program used by the department to promote participation by
10disadvantaged businesses in contracting, subcontracting and
12§ 2110. Contractor performance; general conditions.
13Each Commonwealth agency taking bids in connection with the
14award of any contract shall provide in the general conditions,
15under which a bid will be received, that any person making a bid
16as a prime contractor shall, in his bid or offer, set forth the
18(1) The name and business address of the place of
19business of each subcontractor certified as a disadvantaged
20business that will perform work or labor or render service to
21the prime contractor in connection with the performance of
22the contract and that will be used by the prime contractor to
23fulfill disadvantaged business participation goals.
24(2) The portion of the contract that will be performed
25by each subcontractor under paragraph (1). Except that, in
26the case of an emergency where a contract is necessary and
27essential for the immediate preservation of the public
28health, welfare or safety or the protection of State
29property, the prime contractor shall list only one
30subcontractor for each portion of the contract as is defined
1by the prime contractor in his bid or offer.
2(3) A statement of the efforts made to negotiate with
3disadvantaged businesses, including the name, address and
4telephone number of any disadvantaged business contacted by
5the prime contractor; the date the negotiations took place,
6if any; and a description of the information provided to the
7disadvantaged businesses regarding the plans, specifications
8and requirements for the portion of the contract proposed to
9be performed by the disadvantaged business.
14(ii) A copy of any written notification of the bid
15or offer to perform a contract sent by certified mail,
16return receipt requested, or electronic mail, read
17receipt, to disadvantaged businesses that perform the
18type of work to be subcontracted in sufficient time to
19allow the disadvantaged businesses to participate
21(iii) The specific work the person intends to
22subcontract, that interest in the project is being
23solicited and how to obtain information for the review
24and inspection of the plans, specifications and
25requirements of the invitation for bids or requests for
27(iv) A statement of whether economically feasible
28portions of the contract will be performed by
29disadvantaged businesses, including, where appropriate,
30segmenting or combining elements of a contract into
1economically feasible units.
2(v) Information on whether the person or a
3representative of the person consulted with the Bureau of
4Minority and Women Business Opportunities to ensure
5significant contracting, subcontracting and purchasing
6opportunities for disadvantaged businesses.
7(vi) Information on whether the person or a
8representative of the person participated in any outreach
9activities or events to increase disadvantaged business
10interest and participation in contracting, subcontracting
11and purchasing opportunities.
12(vii) Information on use of the department's
13Internet website to identify certified disadvantaged
14businesses as prospects for contracting, subcontracting
15and purchasing opportunities in connection with a bid or
17(viii) Any solicitation of certified disadvantaged
18businesses for contracting, subcontracting or purchasing
19opportunities and inclusion of certified disadvantaged
20businesses on solicitation lists.
21(ix) Records of solicitations, including a bid
22tabulation, showing the names of all disadvantaged
23businesses solicited and the dollar amount of the bid,
24quote or proposal, as well as copies of all bids, quotes
25and proposals received.
30(xi) Evidence demonstrating any good faith effort in
1the oversight of and timely payment, as provided under
2Subchapter D of Chapter 39 (relating to prompt payment
3schedules), to disadvantaged businesses and to maintain
4the commitment made to any disadvantaged business that
5served as a subcontractor at the time the subcontract was
6awarded, and thereafter.
7§ 2111. Mentor-protégé program.
8(a) Establishment and purpose of program.--
9(1) The department shall establish a mentor-protégé
10program to assist disadvantaged businesses in enhancing their
11capabilities to compete for and perform prime contracts and
12subcontracts awarded by a Commonwealth agency.
13(2) The purpose of the mentor-protégé program is to
14foster long-term business relationships between disadvantaged
15businesses and prime contractors in order to facilitate their
16growth and development and increase their prime contracting
17and subcontracting opportunities with Commonwealth agencies.
18(b) General rule.--A prime contractor that is approved as a
19mentor by the department may enter into a written agreement with
20a disadvantaged business to provide developmental assistance to
21enhance the disadvantaged business's contracting and
22subcontracting capabilities. Developmental assistance provided
23by a mentor prime contractor to its protégé disadvantaged
24business may include, but not be limited to, the following:
28(2) Technical assistance.
29(3) Financial assistance.
30(4) Temporary employee assistance.
5(c) Factor to be considered.--Notwithstanding any other
6provision of this title to the contrary, the mentor-protégé
7arrangement between a prime contractor and a disadvantaged
8business whereby the disadvantaged business serves as a joint
9venture partner or subcontractor to the prime contractor shall
10be an important factor to be considered or weighed by a
11Commonwealth agency in awarding a contract under sections 513
12(relating to competitive sealed proposals), 517 (relating to
13multiple awards), 518 (relating to competitive selection
14procedures for certain services) and 519 (relating to selection
15procedure for insurance and notary bonds).
16(d) Guidelines.--The department shall adopt and publish
17guidelines to enforce and carry out the requirements of this
18section. The guidelines shall be published in the Pennsylvania
19Bulletin and shall include, but may not be limited to, the
26(3) Criteria for measuring program impact and success.
27(4) The required contents of a mentor-protégé written
28agreement. Each written agreement shall specify the type of
29developmental assistance that will be provided by the mentor
30to the protégé disadvantaged business.
1§ 2112. Small business reserve program.
2(a) Small business reserve.--The department shall establish
3a small business reserve program for the purpose of increasing
4economic opportunities for small and disadvantaged businesses
5and affording small and disadvantaged businesses the opportunity
6to bid on State government contracts without competing with
7larger businesses. All procurement by the department shall be
8eligible for designation for the small business reserve program
9and shall be published in the same manner as required for a
10request for proposal or an invitation for bid.
11(b) Reserve account.--Notwithstanding any other provision of
12this title to the contrary, the department shall structure its
13procurement procedures to reserve up to 10% of the total dollar
14value of its procurement contracts, including public works,
15construction and professional services and designed professional
16services contracts, to be made directly to qualified small and
17disadvantaged businesses. However, the total dollar value of
18procurements by the department shall not include the value of
19any contract to which this subsection would not apply because of
20a conflict with Federal law.
24(1) is the lowest bid price;
27(3) is in the best interest of the Commonwealth.
28(d) Other Commonwealth agencies.--
6(e) Construction and application.--
7(1) The provisions of this section shall not be
8construed to preclude any small and disadvantaged business
9from competing for any other contracts that is not
10specifically designated for the small business reserve
25(g) Reports.--On or before December 31, 2014, and on or
26before each December 31 thereafter, the department shall submit
27a report to the Chief Clerk of the Senate and the Chief Clerk of
28the House of Representatives on the operation and effectiveness
29of the small business reserve program. The department may submit
30the report electronically. The report shall include the
15Section 3. Title 62 is amended by adding a chapter to read:
17SURETY BOND GUARANTEE PROGRAM
202102-A. Establishment of program.
212103-A. Surety Bond Guarantee Fund.
222104-A. Contract eligible for guarantee.
232105-A. Disadvantaged business participation.
242106-A. Criteria for denying program participation.
252107-A. Duties of department.
27§ 2101-A. Definitions.
5"Disadvantaged business." A small business which is owned or
6controlled by a majority of persons, not limited to members of
7minority groups, who have been deprived of the opportunity to
8develop and maintain a competitive position in the economy
9because of social disadvantages. The term shall include a small
10business which is owned or controlled by a majority of persons
11who are veterans, including service-disabled veterans.
18"Service-disabled veteran." A veteran who possesses either
19an adjudication letter from the Department of Veterans' Affairs
20establishing a service-connected disability rating or a
21disability determination from the Department of Defense.
25"Surety bond." A guarantee in which the surety guarantees
26that the contractor or principal in the bond will perform the
27obligation stated in the bond. The term shall include the
28following types of bonds:
9"Veteran." An individual who:
17§ 2102-A. Establishment of program.
18The Surety Bond Guarantee Fund Program is established, to the
19extent funds are appropriated specifically for the purposes of
20this act, in the department. The purpose of the program is to
21assist disadvantaged businesses to competitively bid for
23§ 2103-A. Surety Bond Guarantee Fund.
24(a) Fund established.--There is established the Surety Bond
25Guarantee Fund within the State Treasury for the purpose of
26assisting disadvantaged businesses to competitively bid for
27certain Commonwealth contracts.
6§ 2104-A. Contract eligible for guarantee.
20(b) Required provision; notice of cancellation.--No bond
21shall qualify or be eligible for a guarantee under the program
22unless it contains a provision affirming that the bond shall not
23be canceled for any cause unless notice of intention to cancel
24is given to the department at least 30 days before the day upon
25which cancellation shall take effect. Cancellation of the bond
26shall not invalidate the bond regarding the period of time it
27was in effect.
28§ 2105-A. Disadvantaged business participation.
1department. The department shall review the application to
2determine if the applicant is eligible to participate in the
3program within 30 days of receipt of the completed application.
4The department may extend the review period for an additional 30
5days if it determines that additional time is needed to complete
6the review process. The department shall notify the applicant in
7writing of the extended period, including the date it will reach
8its final decision.
9(b) Investigation.--Upon receipt of a completed application,
10the department may conduct an investigation of the applicant,
11including an investigation of its owners, officers, directors,
12principals or agents, in order to determine whether the
13applicant is eligible to participate in the program. If the
14investigation finds and the department determines that an
15applicant is not eligible to participate in the program, it
16shall notify the applicant in writing that the applicant will
17not be approved for program participation. The notification of
18ineligibility shall include the reason the application was not
19approved and that the applicant has the right to appeal the
20department's determination to the secretary within 30 days of
21the date of the notice.
22(c) Criteria for determining eligibility.--An applicant
23shall be deemed eligible to participate in the program if the
24department determines that an applicant meets all of the
30(3) The applicant has been actively operating its
1business for at least one year prior to the application date.
9(7) The applicant or one of its owners, officers,
10directors, principals or agents has not committed or been
11convicted of any of the activities set forth in section 2106-
12A (relating to criteria for denying program participation).
13(8) The applicant meets any other program requirements
14that establish criteria for eligibility that the department
15shall adopt by regulation, guideline or statement of policy
16within 180 days of the effective date of this chapter.
17§ 2106-A. Criteria for denying program participation.
18The department may not approve an application for program
19participation if it determines that the applicant or one of its
20owners, officers, directors, principals or agents committed or
21has been convicted of the following:
22(1) Made a material misstatement in the application or
23any other document required to be submitted by the
24department, under a provision of this chapter or by the
25Department of General Services under the provisions of this
27(2) Failed to comply with or violated any provision of
28this chapter or any regulation, order or statement of policy
29issued by the department under this chapter or any
30regulation, order or statement of policy issued by the
1Department of General Services under this title.
6(4) Does not possess the financial fitness, character,
7reputation, integrity and general fitness sufficient to
8warrant reasonable belief that the applicant's business will
9be conducted lawfully, honestly and in the public interest.
2(12) Became insolvent at any time prior to the
3application date, meaning that the liabilities of the
4applicant exceeded the assets of the applicant or that the
5applicant could not meet the obligations of the applicant as
6they matured or was in such financial condition that the
7applicant could not continue in business without jeopardizing
8the health, safety and welfare of its customers and
10(13) At any time prior to application, has failed to
11disburse payments to subcontractors in a timely manner as
12agreed to under a contract for any reason other than the
13owner's failure to make the agreed-to payments to the
14applicant or because such disbursement would constitute a
15violation of applicable law or an order issued by a court or
16administrative body of competent jurisdiction.
17§ 2107-A. Duties of department.
18(a) Technical assistance.--The department, in consultation
19with the Department of General Services, shall provide technical
20assistance to enable disadvantaged businesses to competitively
21bid on State and other governmental contracts. Technical
22assistance shall include, but not be limited to, assisting
23disadvantaged businesses in responding to bid requests,
24strengthening financial condition and addressing other concerns
25raised or likely to be raised by a bonding company.
26(b) Monitoring program.--The department shall establish a
27monitoring program to monitor the activities of disadvantaged
28businesses participating in the program. The monitoring program
29shall include inspections of projects approved for bond
30guarantees to minimize the risk of calls on the fund. The
1department shall promptly advise the disadvantaged business of
2any deficiencies identified during an inspection. In the event
3the deficiencies noted in the report are not promptly addressed
4by the disadvantaged business to the satisfaction of the
5department, the department may give the disadvantaged business a
6reasonable period to correct the deficiencies or may report such
7deficiencies to the issuing bond company.
8§ 2108-A. Regulations.
9(a) Adoption of regulations.--The department shall
10administer and enforce the provisions of this chapter and shall
11adopt and promulgate regulations, guidelines or policy
12statements necessary to carry out the provisions of this
14(b) Department of General Services.--The department shall
15consult or collaborate with the Department of General Services
16to carry out the provisions of this chapter. The Department of
17General Services shall from time to time provide any technical
18or staff assistance as may be required to assist the department
19in carrying out the provisions of this chapter.
20Section 4. Section 3933(c) of Title 62 is amended to read:
21§ 3933. Contractors' and subcontractors' payment obligations.
22* * *
23(c) Payment.--When a subcontractor has performed in
24accordance with the provisions of the contract, a contractor
25shall pay to the subcontractor, and each subcontractor shall in
26turn pay to its subcontractors, the full or proportional amount
27received for each such subcontractor's work and material, based
28on work completed or services provided under the subcontract,
29 seven days after receipt of a progress payment. Payment
30shall be made under this section unless it is being withheld
3* * *
4Section 5. The provisions of this act are severable. If any
5provision of this act or its application to any person or
6circumstance is held invalid, the invalidity shall not affect
7other provisions or applications of this act which can be given
8effect without the invalid provision or application.
9Section 6. This act shall take effect as follows:
12(i) The amendment of 62 Pa.C.S. § 3933(c).
13(ii) This section.